In a recent exclusive interview, Chipotle’s CEO said that the company will absorb any extra costs caused by tariffs instead of raising prices for customers.
The declaration comes as President Donald Trump continues to threaten imposing tariffs on other nations, like Mexico and Canada, where billions of dollars worth of agricultural products are imported to the U.S. every year.
In response to the possible tariffs, companies will have to decide whether they want to take the hit from higher costs or pass on the extra charges to their customers.
During an interview with the Sunday edition of “NBC Nightly News,” Chipotle CEO Scott Boatwright shared that his company will protect customers at the cash register, as it plans on keeping prices the same.
“It is our intent as we sit here today to absorb those costs,” Boatwright said. Still, he said that if higher costs become a “significant headwind,” then prices could increase.
As things sit, a 25% tariff on all imports from Canada and Mexico could go into place this month if Trump doesn’t decide to delay it once again.
Chipotle is currently importing 50% of its avocados from Mexico, with the other half coming from Colombia, Peru and the Dominican Republic, according to a CNBC report from earlier this month.
Boatwright estimates that tariffs on Mexican imports would increase the cost of goods by 0.6% for the company.
“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,” Boatwright said. “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.”
He went on to say that he and his company don’t think “it’s fair to the consumer to pass those costs off to the consumer because pricing becomes permanent.” Because of this, the current plan is to “stay the course.”
But Boatwright shared that Chipotle doesn’t just plan on weathering the inflationary storm, as his company will look to add another 300 locations this year.
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“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.
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