Hospitality and Tourism

U.S. burrito chain price gap prompts gouging accusations


Mon Dec 17, 2012 10:00am PST

Some of the diners who visited Vancouver’s new Chipotle Mexican Grill (CMG) following the fast-casual restaurant’s December 13 launch say they are shocked that chicken burritos cost 43% more than they do south of the border. Other CMG burritos cost more than 30% more in Canada than in the U.S.

“I would have understood and been happy if there was only a 10% difference and they charged $7 for a burrito. But $8.95? That’s gouging,” said Johnny Zakharia, who crosses the border regularly and frequently eats at some of the more than 1,350 Chipotle Mexican Grill outlets south of the border.

“There will be more people upset about the price difference when they become aware of it – especially people who regularly cross the border,” said Zakharia, who is an advocate for the homeless and the founder of the resource for the homeless BCHomeless.com.

CMG spokesperson Chris Arnold defended the price difference to Business in Vancouver.

“All of our pricing is done on a market-by-market basis, and it’s based on the cost of doing business in a given city.

“That includes everything: real estate, food costs, taxes, labour – the whole shooting match.”

The Economist magazine has what it calls a Big Mac index to gauge costs in different parts of the world. It noted in January that Big Macs cost $4.63 in Canada – 10.2% more than in the U.S.

Ever since the Canadian dollar has hovered near par with the U.S. greenback, however, consumer advocates have scrutinized products such as books, CDs and clothing from chains that operate in both countries.

Higher taxes and wages are often cited for products being priced higher in Canada.

gkorstrom@biv.com

@GlenKorstrom

Tags: prices, consumer issue, food



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