Soaring Avocado Prices Deal Another Blow to Chipotle
Back in July, Chipotle expressed optimism concerning its strained relationship with avocados. Chief financial officer John R. Hartung said following the chain’s second-quarter earnings that higher avocado costs were masking other cost-savings initiatives. Food costs grew from 33.8 to 34.1 percent from the first quarter, or 30 basis points, thanks to the key guacamole ingredient. However, Hartung said Chipotle was starting to see some relief, and with “help from normalizing avocado prices,” margins could creep back to the 20 percent target range the brand set the previous year.