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# New Chipotle CEO addresses crucial question: Free guac?

By Yahoo Finance

Is free guacamole in the future for Chipotle? We asked the new CEO Brian NiccolRead full story

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• I’m more interested in the economic impact of Chipotle products going up “a couple nickels” to meet the demand of free guacamole. Since we’re doing some math here...It costs 11.2 cents for the US Treasury to print a 5 cent nickel as more nickels go into circulation. I’m taking the rest of this commentary

I’m more interested in the economic impact of Chipotle products going up “a couple nickels” to meet the demand of free guacamole. Since we’re doing some math here...It costs 11.2 cents for the US Treasury to print a 5 cent nickel as more nickels go into circulation. I’m taking the rest of this commentary to the Intellectual Dark Web...in the end Kyle Bass a prominent hedge fund manager who’s notorious for his hoarding of \$1MM worth of nickels in hope of their comeback will see the most benefit.

• Raising the price by “a couple of nickels” - haha. Chipotle gives 230 calories as the number in each serving of its guac. Its guacamole is almost all avocado so let’s ignore the negligible calories from the onions and spices they put in there. The average avocado has 322 calories, so a serving of Chipotle

Raising the price by “a couple of nickels” - haha. Chipotle gives 230 calories as the number in each serving of its guac. Its guacamole is almost all avocado so let’s ignore the negligible calories from the onions and spices they put in there. The average avocado has 322 calories, so a serving of Chipotle guac is about 70% of an avocado. According to the Hass Avocado Board, the average retail price of a single avocado is over \$1. While Chipotle buys in bulk and can get cheaper avocados, it needs to account for labor, overhead, waste, profit etc. Add a “dozen” between “couple” and “nickels.”

• Another thing “millennials love”- packing their own rice, tortillas, guac and beans to avoid paying \$15

• Someone please build a model looking at how much avocado prices will spike if Chipotle starts doing free guac. And how much that will screw over consumers, grocery stores and local communities in Mexico who depend on the fruit for sustenance.

• I always ask for extra guac so I’d love the free guac! I also love Chipotle. So I hope they can find the right balance between corporate finances and customer feedback because I’d love for them to be successful and stay in business long term!

• I love Yahoo Finance's singular obsession with making Chipotle give away their guac for free. Not all heroes wear capes.

• Did anyone ask him about pivoting into a guac-as-a-service business?

• I'm a fan of guac any time it's an option. And I'm also a big fan of Chipotle. But, I almost never add the guac at Chipotle. +\$2.45 for guac on a \$6.50-\$8 burrito represents a +31-38% upsell! Meanwhile, the price difference between the vegetarian and meat options is in the range of \$0.45 to \$1.00..

I'm a fan of guac any time it's an option. And I'm also a big fan of Chipotle. But, I almost never add the guac at Chipotle. +\$2.45 for guac on a \$6.50-\$8 burrito represents a +31-38% upsell! Meanwhile, the price difference between the vegetarian and meat options is in the range of \$0.45 to \$1.00... So, in principle, I disagree with their disproportionate pricing and choose to forgo the guac. If they made it about \$1.50, I'd be way more amenable to say yes to the guac.

I also suspect that there's a fair amount of waste factored into their current mark-up for avocados. But, if they lowered the price and took a haircut on the margin, the uptick in sales volume could still deliver a bottom-line beat.

"Last week the company reported upbeat first-quarter results, with earnings per share buoyed by price hikes implemented over the past year. Same-store sales increased by 2.2% and the average check size rose 4.9%, but store traffic did decrease as Chipotle has been recovering from two separate outbreaks of E. Coli — and eroding customer trust — that has been plaguing the company since 2015."

Price hikes were likely to have also driven the decline in store traffic. People tend to dislike paying more for the same thing. But if they introduced better pricing around upselling options, then you could likely still achieve higher avg check spend, while giving the customer the satisfaction of getting more for spending more.

• Sometimes the great thing about Chipotle is the simplicity. I hope this spoken of menu diversification doesn’t lead to a Taco Bell 2.0.

• The business of luring your taste buds to quickly reach out for that pocket!

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