New York (CNN) — Chipotle, which just announced price hikes, said it will likely charge even more at its California restaurants, blaming a new law that raises minimum wages for fast food (and fast casual) workers in the state.
“We haven’t made a decision on exactly what level of pricing we’re going to take,” said John Hartung, Chipotle’s chief financial officer, during an analyst call discussing the company’s third quarter results Thursday, adding that “we’ve been studying” the situation.
“But to take care of the dollar cost of that and/or the margin part of that … it’s going to be a mid- to high single-digit price increase,” he said. “We are definitely going to pass this on.”
A company spokesperson later told CNN that Chipotle hadn’t yet decided whether it will raise prices in California.
California Gov. Gavin Newsom in September signed legislation that raises the minimum wage to $20 an hour for fast food workers, and creates a council that can approve further increases in the future. The state’s current minimum wage is $15.50 an hour and will increase to $16 an hour on January 1. Chipotle said on the call that it currently pays employees $17 an hour in California, where it has about 15% of its roughly 3,300 restaurants.
The new hourly wage for fast food workers will take effect on April 1 of next year. Employees who work at fast food restaurants with at least 60 locations nationwide are eligible.
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