Chipotle is targeting the top of the K-shaped economy

• Chipotle will raise menu prices between 1% and 2% across the board this year.
• CEO Scott Boatwright said Chipotle's core customers probably won't be turned off by the increase.
• Chipotle's core consumers are digital natives who make over $100,000 and aren't shopping for deals.

Chipotle Mexican Grill plans to raise menu prices by 1-2% this year — and leadership is betting that its core consumer segment, digital natives who earn over $100k, won't mind.

Speaking during Tuesday's fourth-quarter earnings call, interim CEO Scott Boatwright said Chipotle is focusing on boosting foot traffic and revenue amid weak comparable sales. To do that, they're targeting their core customer, who sits firmly at the top end of the K-shaped economy.

Chipotle recently conducted a "deep dive" of consumer research to identify the demographics and desires of its core audience and refine its strategy accordingly, Boatwright said.

"What we've learned is the guest skews younger, a little higher income, is typically a digital native, and that their grounded purpose aligns with our North Star as a brand, around clean food, clean ingredients, high protein," Boatwright said. "We are the way they want to eat, and we're going to lean into that in the most meaningful way."

"After looking at the data last week, we learned that 60% of our core users are over $100,000 a year in average household income," he added. "That gives us confidence that we can lean into that group in a more meaningful way, whether it's the solo occasion and/or group occasions to really drive meaningful transaction performance in the year."

Chipotle beat revenue estimates in 2025, its earnings report released on Tuesday showed, despite comparable restaurant sales decreasing 1.7%. The company projected its comparable sales in 2026 would be "about flat," accounting for the openings of between 350 and 370 new restaurants.

In 2026, Chipotle's margins will remain "under pressure," Chief Financial Officer Adam Rymer said during the call, so consumers can expect pricing to increase 1-2% to narrow the gap between rising expenses and menu prices.

The broader restaurant segment is struggling with slumping sales as the K-shaped economy has upended the typical playbook for value deals and marketing campaigns. Lower-income consumers have been cutting back on spending, especially dining out, as they face rising costs across the board, while higher-income households show no signs of slowing their spending.

To draw in traffic, Chipotle recently launched its new protein snack menu, allowing customers to purchase a single taco or a side of meat (either chicken or steak) in a cup. It has also sped up the cadence of its limited-time offer releases, such as the recent promotions for chicken al pastor and red chimichurri sauce.

Those promotions seem to be working, and are proof that Chipotle's core customer isn't particularly price-sensitive, Boatwright said during Tuesday's call.

Prior to the protein snack menu debut, Boatwright said leadership considered whether the launch would result in a "consumer trade-down" effect, a common phenomenon in which price-sensitive consumers opt for a discount deal or a lower-cost menu item than they'd usually order to find better value — but "frankly, we just didn't see it."

Instead of becoming a cheaper alternative to their usual favorite, customers are frequently purchasing the protein side as an add-on to their typical order, which Boatwright said "gives us confidence that the core consumer is not necessarily looking for a smaller, lower price-pointed component to the menu."

Boatwright added that Chipotle will continue to test ideas to keep consumers coming back, including more limited-time offers and drink innovations. He also teased a "Happier Hour" deal specifically to re-engage younger and lower-income customers, but he added, "I don't know if it'll be a meaningful unlock for Chipotle."

Chipotle's stock sank by more than 6% in after-hours trading.