The Chipotle customer has been forced to pay higher prices on takeout orders following delivery apps such as Uber Eats and Grubhub being in such high demand during Covid-19. Yikes!
The company’s CEO just appeared on Yahoo Finance Live to explain the increases.
“It’s no surprise that delivery comes with an added cost. Our belief has been that’s a premium experience from a convenience standpoint. We want to make sure that channel covers the cost — we raised the prices 13% in our app [in the fourth quarter],” Jack Hartung said.
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If 13% seems high, remember that the Mexican grill lowered its delivery fees before the novel coronavirus outbreak.
“We also lowered them before the pandemic, we were charging a $3 delivery fee, we lowered that to $1. If you were ordering in the app prior to the pandemic and now you’re ordering delivery through the app, the increase is 2% to 3%. The 13% increase all it does is allow us to cover most of our cost in delivery.” That makes sense!
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The Colorado-based company says it hasn’t seen much resistance to the higher online from customers, but we see that as hard to believe considering how many “quac is extra” memes there are out there.
“In terms of pricing, I think in the delivery channel there is additional pricing potential there. We found that when people decide they want that channel they’re willing to pay a higher price,” he said.”
And it gets worse: “I don’t think we have reached the limit there. We’ll continue to experiment. We’re not going to go crazy on pricing because we think we can. We’ll try to understand when and where customers want that channel and how much they are willing to pay and we will act accordingly.” Please, don’t let prices go any higher or I won’t be able to afford my burrito any longer!
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