Chipotle Mexican Grill (CMG, Financial) has announced plans to open its first restaurant in Mexico City by early 2026, marking a new phase in its international expansion strategy. The company has signed a development agreement with Alsea, a prominent Latin American food service operator that also franchises Starbucks, Domino's Pizza, and Burger King in the region. Following the launch of its first store, Chipotle aims to further explore the potential of the Latin American market.
This strategic move comes amidst heightened trade tensions between the Trump administration and Mexico. Previously, Mexican avocados faced a 25% punitive tariff, which was temporarily suspended due to compliance with the USMCA agreement. Despite Chipotle's efforts to diversify its avocado sourcing, half of its supply still depends on imports from Mexico. Recent threats from Trump to impose comprehensive tariffs on Mexico, unless illegal immigration is curtailed, have introduced uncertainty to Chipotle's supply chain costs.
