Bad news for burrito addicts: Chipotle announced it will raise its prices for the first time in three years, by 5 percent, in response to the increase in beef, avocado and cheese prices.
The price hike will begin by the end of the second quarter and go into full effect in July, Chipotle Mexican Grill CFP Jack Hartung said in a call with analysts Thursday.
"It has been nearly three years since our last companywide price increase, and while we want to remain accessible to our customers, we are at a point where we need to pass along these rapidly rising food costs," Hartung said.
In New York City, the cost of a chicken burrito would rise from $7.81 to $8.20.
Meanwhile, the popular Denver-based food chain, with about 1,500 locations nationwide, reported its first-quarter earnings rose 8.5 percent, though food costs were up 33 percent from last year.
The price hike stems from an increase in steak prices, up 15 percent this year, Reuters reported, marking the highest level Chipotle has seen since it was founded in 1993. According to the U.S. Department of Agriculture, beef prices hit a 27-year high of $5.28 per pound in February. Hartung said "beef prices are expected to continue to move higher as supply remains tight.”
Avocado and cheese also factored into Chipotle's price hike, Bloomberg reported. Cheese prices are expected to rise by 10 percent this year and a drought in California has caused a shortage of avocados.
However, the company said it has yet to see an increase in pork prices, despite a piglet virus killing pigs around the country.