Everyone was rooting for Chipotle. But lately being a Chipotle fan feels a bit like being a Washington Redskins fan: just when you think things are going to get better, they get worse again.
After an E. Coli outbreak that caused dozens of customers across 14 states to get sick, the chain went into crisis mode. They reevaluated their food safety measures and began to cook some of their food in central kitchens like other fast food places.
They also gave away a lot of free food. This was a measure we said wasn’t going to work. The problem with Chipotle wasn’t about the $10 customers were spending on lunch. It wasn’t even about the $12 lunches that happened when they paid extra for guacamole. What Chipotle lost when it made its customers sick was their trust, and even $70 million in free burritos won’t bring customers back if they’re literally afraid for their safety.
Executives at the fast-casual chain are realizing that now. Bloomberg obtained a letter Chipotle sent to the Securities and Exchange commission in July that said that “given the unusual sales trends resulting from the food borne-illness incidents, we were unable to calculate or accurately estimate any indirect impact that promotional activity had on revenue.” It also notes that “promotional offers of free food do not directly impact revenue.”
So what do they do then? Sales are still down, and it doesn’t look like they’re going to climb any time soon.
Chipotle needs to find a solution that fits the problem they have- a problem which was never an issue with cost. Free food as a solution to food-borne illness will never be the answer. Chipotle needs to focus its efforts on convincing the public that it’s safe to eat there, not that it’s cost-effective. Until we can trust them again, they can keep their burritos.
[H/T First We Feast]
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This is an opinion piece. The views expressed in this article are those of just the author.