And So It Begins…

MSN: Devouring a McDonald’s Big Mac or a Chipotle burrito is on a fast-track to becoming a luxury for many U.S. consumers. It’s not as crazy as it sounds, given the surging costs for beef and, above all else, hourly workers.

In May, San Francisco joined the city of Oakland in having the highest minimum wage in the nation at $12.25 an hour. Minimum wages in San Francisco will reach $15 per hour by 2018. These hikes have led to recent price increases at Chipotle of 10% in San Francisco and 7% in Oakland.

“In San Francisco, our occupancy costs are about double the Chipotle average as a percentage of sales, and our menu prices there [were] right around the average for Chipotle restaurants around the country, so increases to wages can have a greater impact than they might elsewhere,” Chipotle spokesman Chris Arnold said in an email. Occupancy costs are the expenses related to doing business in a location, including charges for rent, electricity and water.

Surprised? You shouldn’t be. This post is over a year old.

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