Chipotle CEO says doing business in California is getting harder
By Eliyahu Kamisher and Karen Breslau | Bloomberg
Chipotle Mexican Grill Inc. Chief Executive Officer Brian Niccol said California’s business environment is slowing the company’s ambitions for growth in the state.
“Unfortunately it’s getting harder versus being easier,” Niccol said on Bloomberg TV’s California C-Suite special, examining the state’s challenges. “There’s a lot of other places where we operate restaurants where it’s a heck of a lot easier.”
The remarks contrast with the optimism that Chipotle showed over California five years ago, when it announced plans to move the company’s headquarters to Newport Beach from Denver.
Niccol said he still plans to expand the restaurant chain beyond the more than 400 locations it has across the state, “but it would be even more growth if it was a little bit easier” to open the stores and run them.
While California is a hub for technology innovation and industry, some business leaders have expressed frustration with its regulatory burdens and high taxes. Ongoing battles with the state’s strong labor movement have also been a point of tension.
Niccol spoke in Los Angeles, where bankers, dealmakers and celebrities gathered this week to attend the Milken Institute Global Conference in nearby Beverly Hills. The annual confab came amid high financial angst as renewed bank turmoil, recession fears and mounting concern over commercial real estate loomed over attendees.
California, the most-populous US state and home to the world’s fifth-largest economy, has been the epicenter of the regional banking crisis and the downturn of technology industry that’s led to thousands of layoffs. This week, a writers strike has halted Hollywood production for networks and streaming companies.
‘Really Expensive’
Niccol said that Chipotle’s growth in California is also limited by “labor relations,” along with a high cost of living, which affects employees and potential customers.
“It’s really expensive for folks to live in some of these areas where we want to open up restaurants,” he said in a separate interview after the show.
Chipotle is a backer of a voter initiative to block California’s FAST Recovery Act, a law that Governor Gavin Newsom signed last year to increase wages and improve working conditions for fast food and restaurant workers.
The referendum to overturn the act will be on the ballot in November 2024.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.