Wait - have a little patience - let's look again in six months and see:
- increase in prices
- decrease in employee hours
- less full time positions available
- more automation eliminating min wage positions.
Yes it is a sufficient argument when looking at all the moving parts. Remember Chipotle is a Corporation which raised it's prices, but the stores are
franchises.
In May, Chipotle said that it would raise hourly wages for its restaurant workers to reach an average of $15 an hour by the end of June. Company executives said at the Baird Global Consumer, Technology & Services Conference that they would be passing along the price of raising pay to consumers.
The Corporation sets standards, but the Corporation does not pay the store employees - the franchise does. (Franchise owners are small business men and woman.) The costs of running the business includes fix expenses - rent/mortgage - franchise fees - etc. Then there are what is called 'controllable'. The big three are Labor - food costs - utilities.
Food cost can only be controlled by limiting waste - because they can only buy from the Corporation.
Utilities - you have to balance comfort vs peak seasons. Many franchise owners lock these controls.
Payroll - total labor - (wages, taxes, benefits) to be successful, this needs to be in the 15% range.
Adding 4% to the retail cost is somewhat helpful, but if your labor goes up 40-60%, you have to cut costs other places.
Yes, it's only 4% - the cost in jobs will be higher.
Ever wonder why these are popping up all over?
They are cheaper than the employees they replaced.