207. Chipotle Consumer Sentiment Falls Again

The Restaurant Report

Shares of Chipotle Mexican Grill Inc. CMG, -5.23% shed 5.23% to $1,252.89 Wednesday. Chipotle Mexican Grill Inc. closed $705.66 short of its 52-week high ($1,958.55), which the company achieved on September 23rd.
The stock underperformed when compared to some of its competitors Wednesday, as McDonald's Corp. MCD, -4.38% fell 4.38% to $231.05, Yum! Brands Inc. YUM, -2.68% fell 2.68% to $109.46, and Domino's Pizza Inc. DPZ, -2.51% fell 2.51% to $328.02. Trading volume (306,196) eclipsed its 50-day average volume of 267,893.
Chipotle Hiring Issues
A recent report, titled “Unequal Opportunity: Uncovering Discrimination in Hiring at Chipotle Mexican Grill” reached disturbing conclusions, according to experts. Specifically, of the applications submitted in 37 states over a three-week period in February, white applicants heard back from recruiters about “significantly” more jobs than Black applicants, the report found.
Pricing Starting to Affect Sentiment
Finance chief Jack Hartung said the chain has raised prices by about 10% for the 12 months through Q1 compared to 2% in a typical year all at the same time Chipotle continues to see falling consumer satisfaction. Foodable Labs reported the third quarter in a row with falling brand sentiment specifically related to order accuracy and the lack of food quality. Current Q2 has the brand's overall sentiment rating at 76.98 the lowest in the history of the brand.
Overall Sentiment
Food Quality 75.91 (Down YOY)
Food Value 73.71 (Down YOY)
Food Accuracy 72.06 (Down YOY)
Source - Foodable Labs
Hartung isn’t certain that the current leveling off signals a full reprieve. “I’d love it to be that inflation continues to pause and that our ingredient costs are stable here on out and I’d love to be able to say six months from now that we’ve not increased our prices,” Hartung said. “But we’ll see. It all just depends on the inflationary environment.”