Good news for Chipotle Mexican Grill (NASDAQ:CMG) today as reports note that your chances of not being able to get chicken al pastor have pretty well subsided. But the potential fallout from the chicken supply issue may not have all faded away. Investors are taking it all in stride, meanwhile, as shares were up over 2% in Friday afternoon’s trading.
Reports from the popular burrito chain revealed that the return of chicken al pastor has been a winner for Chipotle locations, to the point where supplies were starting to be stretched thin. In a bid to prolong the supply and get over the hump, Chipotle turned to its store management, telling them not to order chicken dishes as part of their fringe benefit-free meals and instructing them to lay down the chickenless lifestyle on their employees.
The whole thing was over in less than a week, and chicken is now freely available to employees and customers alike once more. But some wonder if this chicken affair won’t prove the straw that broke the camel’s back.
Many Workers Found the Policy Unnecessarily Draconian
The impact of the chicken crunch took hold fairly quickly and hit wide. For instance, many workers found the policy unnecessarily draconian, particularly considering how many employees turned to chicken over beef or pork for health reasons or even as part of religious practices. Employees at the sole unionized Chipotle in the United States, in Lansing, Michigan, called it “…disrespectful, just on a personal level.”
Since Chipotle depended on store managers to maintain the employee chicken ban, that represented an “unfair position,” noted the Lansing store’s collective bargaining committee. While this might seem overblown, some look at it as a matter of “…it’s chicken today, is it going to be…drinks tomorrow?” Will a lack of chicken today lead to greater unionization efforts tomorrow? That’s not a hassle Chipotle needs right now, and it should be considered accordingly.
Is Chipotle a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CMG stock based on 19 Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After a 56.46% rally in its share price over the past year, the average CMG price target of $3,036 per share implies 4.87% downside risk.
