Tortilla Mexican Grill Reviews Pricing Strategy Following Budgetary Pressures
Mexican fast-casual restaurant chain Tortilla Mexican Grill has announced it is actively reviewing potential price adjustments after being significantly impacted by cost increases linked to recent Government budgetary measures. The company informed shareholders on Wednesday that it has encountered substantial "cost headwinds" following rises in taxes and labour costs implemented in April last year.
Labour Market and Economic Concerns
The burritos and tacos specialist further warned that it anticipates continued pressure in the UK labour market, which it believes will "have a downward impact on the consumer economy." The group expects labour costs to rise further this coming April, adding to existing financial pressures. Despite these challenges, the business, which operates 81 sites across the United Kingdom, reported making a "positive start" to 2026, outperforming the wider UK market over the past three weeks.
Strong Financial Performance Amid Sector Challenges
This announcement accompanied the release of Tortilla's financial results, which revealed group revenues increased by 8.5%, equivalent to £5.8 million, reaching £73.8 million in 2025. Notably, the company achieved UK like-for-like sales growth of 6.2% despite broader pressures affecting the restaurant and fast-food sector. The business attributed its resilience to several factors, stating: "Supported by the success of our winter menu, ongoing investment in food, brand and technology, and encouraging results from the converted French stores, the business is well positioned for the year ahead."
Leadership Commentary and Market Response
Andy Naylor, chief executive of Tortilla, commented: "I'm happy to report that we finished 2025 positively, with a strong fourth quarter capping off a record year for UK profitability. It is testament to the hard work of the team that we were able to achieve UK Q4 like-for-like sales growth of 7.8%. Our in-store and delivery channels both exceeded the industry reported benchmark, and this is particularly pleasing considering the strong prior year comparatives." Following these announcements, shares in the hospitality business experienced a modest increase of 0.3% during Wednesday's trading session.
The company's strategic review comes after its acquisition of rival Mexican chain Chilango last year, a move that has contributed to its expanded market presence. As Tortilla navigates these cost challenges while maintaining growth momentum, the potential price adjustments will be closely monitored by industry observers and consumers alike.
