Fast casual burrito chain Chipotle announced this week that it will absorb the cost of any of Donald Trump’s tariffs and not pass them along onto its customers, according to a statement by company CEO Scott Boatwright.
Trump has threatened to impose tariffs on imports from several foreign countries, including US neighbors and allies Mexico and Canada. On Monday he reiterated that they would come into force on Tuesday.
Economists have warned that such a move would see the cost of goods in the US balloon as companies pass the increased costs along to consumers, but it appears Chipotle has vowed to take the hit to its bottom line.
Boatwright told NBC Nightly News’ anchor Hallie Jackson that, at least for now, Chipotle plans to keep its costs consistent even if the cost of some of its ingredients increases due to tariffs.
“It is our intent as we sit here today to absorb those costs,” he told the program. However, he warned that changes could come down the line if price increases became a significant burden for the company.
While Chipotle is mostly safe from the worst of what the tariffs might bring, it does import approximately 50 percent of its avocados from Mexico. The rest come from Colombia, Peru, and the Dominican Republic.
Trump has threatened to impose a 25 percent tariff on imports from Canada and Mexico, and an additional 10 percent tariff on goods from China over an initial 10 percent tariff imposed last month.
According to Boatwright, Chipotle’s prices would increase by approximately 0.6 percent due to the announced tariffs.
“We are fortunate to have such an extraordinary economic model at Chipotle that we can withstand those types of inflationary pressures and not have to pass those costs off to the consumer,” he told NBC News. “And that’s our intent this year. Let’s hold pricing constant, because we don’t know if the tariffs are transitory, if they’re going to be permanent, how sticky they’ll be in the new administration.”
Boatwright said he did not believe it was “fair to the consumer to pass those costs off … because pricing becomes permanent.”
“We’re going to stay the course,” he said.
The CEO said outside of the tariffs, he believes Chipotle is in a good place and is looking to open 300 new locations at a time when many American restaurant chains and retailers are shuttering stores or — in some cases — filing for bankruptcy.
“If we can hold price constant, regardless of what’s happening in inflationary pressures, what’s happening with global economic uncertainty, and give the consumer abundance, [and] variety with wholesome, fresh ingredients that they can’t get anywhere else, that’s how we’ll deliver value for the consumer in 2025,” he said.
