Chipotle CEO: Don't come to us for dollar menus

By Charles Passy

The fast-casual chain isn't looking to compete with the likes of McDonald's when it comes to bargain pricing

Chipotle has seen its stock price decline by more than 30% since early July.

In terms of offering deals to cost-conscious diners, Chipotle CEO Scott Boatwright is making it clear: The fast-casual chain doesn't plan to go the Golden Arches route.

Boatwright told Yahoo Finance earlier this week that he has no intention of launching a "dollar" or value-type menu a la McDonald's, saying in effect that he's content with the chain's current pricing strategy.

"You know, our food is worth, in my mind, every penny we ask someone to pay for it," Boatwright said. "I don't want to devalue our core offering."

By contrast, McDonald's has lately emphasized value, following a period when it faced criticism for pricing that many consumers said was beyond their budgets. The fast-food chain's current offerings include Meal Deals starting at $5, Snack Wraps for $2.99 and buy one-add one-for-$1 specials on certain items.

Chipotle CEO Scott Boatwright says his company offers food that is worth "every penny we ask someone to pay for it."

Not that Chipotle (CMG) is unaware of the financial pinch some consumers are facing. The chain notes that it offers a chicken taco for $3.50 and that its average price for a chicken burrito is still under $10.

But ultimately, Chipotle, which has long promoted what it describes as its careful sourcing of food, aims to appeal to consumers based on something other than price, Boatwright explained.

"Our most loyal consumers come to us because they want the best ingredients in the world prepared in-restaurant, fresh every single day," the CEO told Yahoo Finance.

What kind of income level does that consumer have? Boatwright has previously said the chain is finding it tougher to appeal to diners with household incomes below $100,000. "We're losing them to grocery and food at home. They feel the pinch and we feel the pullback from them," he said.

On social media, you'll find no shortage of people who complain about Chipotle's pricing. On a Reddit thread about this subject - that specifically referenced a meal costing $35 for two - one commenter noted: "I'm eating at a sit-down restaurant for less than that." Another simply said Chipotle's pricing is "bat s-t crazy."

'You know, our food is worth, in my mind, every penny we ask someone to pay for it. I don't want to devalue our core offering.'Chipotle CEO Scott Boatwright

Restaurant-industry analysts nevertheless say Chipotle's pricing strategy makes sense because the chain has never been about beating others on cost, but rather by standing out by way of quality.

"They have a standard and there's nothing wrong with that," said Izzy Kharasch, president of Hospitality Works, a consulting firm based in Chicago.

Kharasch added that despite the fact its pricing may be higher than McDonald's and some other chains, Chipotle offers portions that are fairly large, so there's value in that as well. He noted that he can often make two meals out of one Chipotle order.

Moreover, Kharasch said if Chipotle were to go the value route, it probably wouldn't move the needle in terms of sales because that's not how the company is perceived. If anything, he believes it would backfire because it would send the wrong message.

"They would lose a lot more customers than they would gain," Kharasch said.

Still, these aren't necessarily robust times for Chipotle. The company's stock price has declined by more than 30% since early July. And it recently reported a same-store sales decline of 2.5% for the fourth quarter, and said it expects same-store sales to be "about flat" in 2026.

Meanwhile, McDonald's (MCD) has seen a slight uptick in its stock price - above 5% - in the past year. The company reported its fourth-quarter earnings on Wednesday, noting that its revenue rose 10% to $7.01 billion, with same-store sales increasing 5.7% during the period.

See also: McDonald's says value meals are bringing back customers, but it still expects a tough year ahead

McDonald's affirmed that its focus on value is driving traffic to its locations - and it pledged to keep that commitment.

"As I've said before, and I will say again, McDonald's is not going to get beat on value and affordability," CEO Chris Kempczinski said during an earnings call. "It's in our DNA, and we remain agile to respond as appropriate to a dynamic, competitive landscape."

Veteran restaurant-industry analyst Mark Kalinowski also believes McDonald's is benefiting from its emphasis on keeping things within reach for customers. But Kalinowski also thinks Chipotle's approach makes sense, noting that the Mexican-themed chain is fast-casual to its core, so its identity is indeed tied to being a cut above McDonald's.

"It's premium relative to traditional fast food," he said.

Chipotle is saying it's looking at one lower-cost option of sorts in the future: a "happier hour" deal that would drive traffic during off-peak times.

Arlene Spiegel, a New York-based restaurant consultant, said that's a smart approach, especially since diners are becoming more flexible these days in terms of when they eat. At the same time, Spiegel echoed the views that Chipotle is smart to keep their pricing where it's typically at.

"They don't want to be the bottom feeder," she said.

-Charles Passy

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

02-11-26 2041ET