I wonder what David Einhorn, who is famously short Chipotle’s stock, thinks of their new tofu tacos/burritos? He said that Chipotle is facing increasing competition from the likes of Taco Bell. I don’t think Chipotle’s new shredded tofu is going to change his mind much about his short thesis, but for vegetarians this might be a hit. However, when they ask you for chicken or pork at Chipotle, it would just seem odd to say, “I’d like the shredded tofu please.” To each his own though, but for Einhorn, I still think he says the stock is headed lower.
As costs for cheese and meat continue to climb, Chipotle is looking to attract vegetarians with a new tofu filling.
The Mexican food chain plans to test a shredded tofu filling called “Sofritas” in the San Francisco Bay Area next month, with the test expanding to other markets based on customer feedback. The Denver-based company said the tofu will be braised with roasted tomatoes, chipotle sauce and poblano peppers.
The move comes as Chipotle and other restaurant chains are being pressured by higher costs for ingredients. Earlier this week, Chipotle warned that its fourth-quarter profit would miss Wall Street expectations as a result of higher food costs. The company’s growth is still strong relative to other fast food chains, with revenue up more than 17 percent from a year earlier. But food costs are expected to be just about a third of sales, up 130 basis points from last year.
Full story at BusinessWeek.
Image Source: Veria.com