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Chipotle will pass the California minimum wage hike on to customers

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Chipotle will pass the California minimum wage hike on to customers


Chipotle has tweaked its menu prices for food inflation—but it still needs to revise it for rising labor costs.

Last week, Chipotle’s menu boards started showing slightly higher prices. At one Brooklyn eatery, a $10.95 chicken burrito bowl’s price suddenly cost $11.35—without extra guac, cheese, or anything. The Mexican grill chain also hiked prices for soft drinks, as Reddit users pointed out. But this hike “does not consider any part of the California wages that’ll happen next year,” chief financial officer Jack Hartung said during the company’s third-quarter earnings call on Oct. 26.

Starting in April 2024, fast food workers employed at quick-serve restaurants that have 60 locations or more in California will be eligible for a minimum wage of $20 per hour, up from the current $15.50. For Chipotle, the jump will be a little less jarring considering it already pays $17 as starting wage in the state. But the effect won’t be insignificant.

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Around 15% of Chipotle’s 3,300 stores are located in California. The minimum wage increase will add between 2.5% and 3% to the company’s overall labor costs.

While Chipotle hasn’t disclosed the exact level of pricing to combat this cost pressure, it’s sure that it won’t absorb it all. For customers, “it’s going to be a mid- to high-single-digit price increase, but we are definitely going to pass this on,” the CFO said.

A brief roundup of Chipotle’s four price increases in two years

Worker pay triggered menu pricing changes in October 2021 as well. Back then, it attributed a 4% hike in menu prices to hourly wages for employees rising to $15 an hour.

Between then and now, the company has raised prices three more times, including earlier this month, citing inflation and rising ingredient costs. However, it claims that the benefit from last year’s menu price increases was “mostly offset by inflation across several food costs,” including beef, cheese, and avocado, as well as high gas prices.

Chipotle’s financial results, by the digits

11%: Year-on-year increase in sales, to reach $2.5 billion

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37%: Digital sales made via the Chipotle website, Chipotle app or third-party delivery aggregators

285-315: Stores Chipotle expects to open in 2024, with 80% of them having digital order drive-thru pickup lane “Chipotlanes”

114,000: Total number of Chipotle employees

3%: Chipotle’s price increase earlier this month

Quotable: Demand for Chipotle’s holds strong

“The consumer is clearly under pressure with inflation over the past year and pretty much everything with gas and groceries and really across the board higher interest rates. We continue to do well not just across our income levels, but with the lower income. They’re holding up really well. They’re really hanging in there at about the same level as our medium and high income levels.”

CFO Jack Hartung on the Oct. 26 earnings call

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One more thing: Chipotle isn’t worried about Ozempic or Wegovy

The rising popularity of weight-management drugs like Ozempic and WeGovy has dimmed the outlook for several food companies—especially fast- and junk-food. Walmart, far instance, warned of a slight pullback in sales as baskets evolved. Packaged food giant Conagra said it’ll consider changing portion sizes if the obesity drugs have an impact. PepsiCo and Coca-Cola have downplayed the threat, but they do have plenty of low-cal options on offer.

Industry watchers are encouraging fast-food chains like Domino’s Pizza, McDonald’s, KFC, and Krispy Kreme to rethink their menu offerings, tilting toward a healthier palate. Chipotle, which claims to have seen no material impact from the drugs yet, says its food already complements weight-loss goals.

“Our food is a good solution. Because it’s clean, it’s not fried,” CEO Brian Niccols said on the earnings call. “It allows people then to customize a meal that would fit their diet that they’re trying to achieve, whether they’re on GLP-1 drugs or whether they’re on a keto diet, or a Whole30 diet, or insert the lifestyle diet that they’re on, or the lifestyle drug that they might be on. The good news is we’re positioned to be able to customize that diet for you with clean food done in a very healthy way.”



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Lights back on after power outage in parts of Southern California

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Lights back on after power outage in parts of Southern California


Lights back on after power outage in parts of Southern California – CBS Los Angeles

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Several cities in Southern California experience power outages on Christmas Eve night. Crews worked around the clock to restore power to residents just in time for the holiday morning.

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How California’s high-speed rail line will advance in 2025

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How California’s high-speed rail line will advance in 2025


California’s high-speed rail project, which aims to connect San Francisco and Los Angeles with a 494-mile route capable of speeds up to 220 mph, aims to continue construction in 2025.

Phase 1 of the project focuses on linking San Francisco in the north to Anaheim via Los Angeles in the south, with plans to extend the line north to Sacramento and south to San Diego in Phase 2.

The California High-Speed Rail Authority, which is overseeing the project says it has already generated significant economic benefits, including creating over 14,000 construction jobs and involving 875 small businesses.

But despite its transformative goals, the project remains politically contentious, with critics questioning its costs and viability. It has been in development since voters approved funding in 2008 and has faced delays, cost increases, and shifting timelines.

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Composite image of trains and the California state flag. The state’s high-speed rail project will continue construction in 2025, despite Republican critics questioning its costs and viability.

Photo Illustration by Newsweek

Work Planned for 2025

In a statement to Newsweek, the California High-Speed Rail Authority outlined its planned work for 2025, which focuses on continuing construction in the Central Valley between Merced and Bakersfield.

The 171-mile segment between Merced and Bakersfield will be the first part of the line to be operational, with services expected to start between 2030 and 2033. Of that section, 119 miles are currently under construction.

Of the planned structures in the Central Valley section, 85 are underway or completed out a total of 93 on the segment. Work will continue on these structures as well as on the tracks capable of handling high-speed trains.

By the end of 2025, civil construction on the 119-mile segment currently underway is expected to be completed and construction will begin on the next stretches to Merced and Bakersfield.

In 2025, the authority also plans to advance design and begin construction on its stations in the Central Valley. It also expects to select a manufacturer for the trains.

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Although the initial operating segment will only run 171 miles from Merced to Bakersfield, environmental clearances have been obtained for 463 miles of the 494-mile Phase 1 route, completing the stretch between San Francisco and Los Angeles. Only the Los Angeles-to-Anaheim section is still awaiting approval.

California High Speed Rail Map
A map showing California’s proposed high-speed rail network from February 2021. The initial operating segment, between Merced and Bakersfield, is expected to begin services between 2030 and 2033.

California High Speed Rail Authority

The Authority said it plans to publish its draft environmental impact report for the Los Angeles-to-Anaheim section in 2025, a key milestone for the eventual full-approval of Phase 1.

More than $11 billion has been invested to date, with funding sources including state bonds, federal grants, and proceeds from California’s carbon emission trading auctions.

The authority has not yet received funding to construct the segments westwards from the Central Valley to the Bay Area or southwards to Los Angeles.

Despite this, the authority said it was committed to pushing on.

“California is the first in the nation to build a true high-speed rail system with speeds capable of reaching 220 mph,” the Authority told Newsweek. “The Authority remains committed and aggressive in moving this historic project forward while actively pursuing additional funding.”

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Political Opposition to the Project

Despite ongoing progress, the high-speed rail project continues to face political opposition, particularly from Republican leaders.

While President Joe Biden’s administration has invested billions in it since 2021, the incoming Republican administration, which will control the House of Representatives, the Senate, and the presidency, is unlikely to continue funding it at the same level.

Representative Sam Graves of Missouri, who chairs the House Transportation and Infrastructure Committee, has criticized the project’s costs and funding strategies.

In a statement to Newsweek, Graves described the rail line as a “highly troubled project” and raised concerns about its reliance on government subsidies.

California High Speed Rail Rendering
A rendering of one of the trains for California’s proposed high-speed rail project, which is currently under construction.

California High Speed Rail Authority

He pointed out that the current funding supports only a limited segment between Merced and Bakersfield, which he estimated will cost $35 billion.

“Full cost estimates [for Phase 1, between San Francisco and Anaheim] now exceed $100 billion and growing,” Graves said, calling for a comprehensive review of the project before any additional funding is allocated.

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“California high-speed rail must have a plan and prove that it can wisely and responsibly spend government money—something it’s failed to do so far.”

The congressman stated that over the next four years, he would oppose any further federal funding for the California high-speed rail project.

Instead, Graves advocated for efforts to redirect unspent funds and focus on improving existing transportation infrastructure, such as Amtrak.

Graves also emphasized the need for private-sector involvement in future rail projects, citing Brightline’s operations in Florida and Las Vegas as a successful example of private investment.

While Graves acknowledged the potential of high-speed rail, he argued that the California project has failed to meet the necessary criteria for viability and local demand.

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The authority told Newsweek it would engage with the federal government to seek other funding sources.

“We continue to explore strategies aimed at stabilizing funding, potentially allowing the program to draw private financing and/or government loans,” it said.



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Hawaii resident flies to California to clear name from identity theft

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Hawaii resident flies to California to clear name from identity theft


HONOLULU (HawaiiNewsNow) – A Honolulu man who had his identity stolen had to fly to California to clear his name. He acted quickly to stop his bank account from being completely drained.

Jamie Dahl said he’s speaking out because identity theft can happen to anyone and he’s not sure how his personal information was stolen.

“I’m still mystified how he pulled it off,” Dahl said.

In late November, Dahl found some fraudulent charges on his credit card so he ordered a replacement card.

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Two weeks later, he says went to his online bank account with Bank of America and discovered his identity had been stolen. The hacker had account access for instant money transfers.

“My phone number is missing, my email is missing, my mailing address. I live in Honolulu. It’s Mililani,” Dahl said.

He knew he was in trouble.

Dahl said two days after his discovered his identity had been stolen, he had to fly to California to clear his name because there are no Bank of America branches in Hawaii.

He brought several forms of ID to re-authenticate himself.

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“It was just an incredible ordeal,” he said.

“The bad guys are shopping just like everybody else for Christmas,” said former HPD Deputy Chief John McCarthy, who investigated cybercrime.

McCarthy says check your bank account daily and having a local bank is helpful.

“If you don’t have a local bank, you are that much father away. I’ve had problems with banks that are on the East Coast,” he said.

“It takes a day to communicate with them, a day to get a response. That’s a lot of damage you can do in 24, 48, 72 hours,” McCarthy added.

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McCarthy says most banks have streamlined their re-authentification process so you don’t have to see them in person.

Hawaii News Now contacted Bank of America to find out their process and are waiting to hear back.



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