From Rats to Viruses–Is Chipotle Under a Spell?

Perhaps it is the cycle of things, or gravity. What goes up must come down. Or, maybe it’s just bad karma. Just when you think Chipotle has seen the worst of times, another video or news break flashes across the screen, and you wonder, just how many more of these “newsflashes” can Chipotle take?

I, for one, was an all time Chipotle fan, even after the 2015 E. coli outbreak that was followed close on its heals by a norovirus breakout in Boston and Simi Valley, and a Salmonella report in Minnesota. I don’t know, call me guacamole obsessed, but their fresh food, awesome salsas, and tortilla chips with a touch of lime left their mark and foodborne illnesses were relegated to old news.

Even when hackers struck, using malware to steal customer payment data in most of its 2,250 restaurants for about three weeks starting in mid-March, I still stood in line on Friday night for my tortilla salad with black beans and white rice.

In June, one of the senior executives, Mark Crumpacker, was caught on wiretaps ordering cocaine delivered to his Manhattan apartment—13 times. And now I’m beginning to wonder, is Chipotle paying attention? Do they really care?

And then the rats fell from the ceiling in one of their Dallas restaurants. I shouldn’t have watched the video. One rat scurrying across the floor, one lying paralyzed from the fall, and another trying to make its way up the wall was enough for me to say, “Hold the beans and rice, actually, forget the whole burrito.”

The problem is, it can happen to anyone. And yet it doesn’t. Let’s not forget that the same week another norovirus outbreak was reported in Virginia.

 

What’s going on?

For starters, their stock is tanking. July found it down by 17 percent and holding. The daily net sentiment—a measure of online positive versus negative feedback—fell from 55 on July 17 to minus 11 on July 18.

While E.coli can be traced back through the supply chain, the norovirus outbreaks are usually caused by sick workers that prepare the food.

Hackers are everywhere, and yet one wonders, isn’t there a way to protect your loyal patrons?

Okay, senior executives with a cocaine problem. Not a deal breaker but, again, isn’t anyone paying attention?

As far as rats, the suspected entrance was a hole that was being repaired. Apparently, not repaired fast enough.

The truth is, consumers don’t want excuses. They want to know that when they go out for a meal or pick up a meal to go, it will be in a safe and clean environment and they will not be poisoned by the food. It’s that simple.

 

Chipotle’s PR Move

While investors are wondering if the chain can make a solid return from current mishaps, Chipotle’s PR moves appear a little subdued in light of the recurring transgressions. Some believe it’s time for a total rebrand, including a name change. Instead, the management’s approach is to run some commercials and offer some select menu changes that are currently in the testing phase such as replacing chorizo with queso. In line with some of the other fast casual chains, such as Panera, Chipotle is going digital with kiosks, ordering and delivery services. Um. No, I don’t think that’s getting me back into the Chipotle fan club. Have you tried the queso?

According to an article in MSN, Eric Schiffer, chairman of Reputation Management Consultants, said, “The leadership is letting ego take this brand down. It’s the single most incompetent leadership team in the history of restaurants.” Wow. That’s a pretty heavy statement. And one I have to agree with. Come on, Chipotle, I’m with Randall Terry on this one. 

In addition to not creating an environment of trust and accountability, Chipotle hiked up their prices in 2,200 locations. Excuse me, loyal customer here, aren’t you trying to win me back?

 

{{cta(‘292ee73d-e353-4345-b445-fea4bf838c2a’)}}

 

Author:
Categories:
Tags:
  • Subscribe to our latest insights

chatsimple

Are you capital raise ready?