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Chipotle continues to rebound slowly from E. coli scandal

February 11th, 2016

 

In the fourth quarter of 2015, Chipotle Mexican Grill Inc. experienced some fallout with the public when customers became sick after eating their food at multiple locations.

 

There were 60 reported cases of customers contracting E. coli from food at the fast-casual restaurant beginning at the end of October 2015.

 

To make matters worse, Chipotle was then linked to an outbreak of a norovirus in California and in a restaurant near Boston College.

 

While the source of the E. coli infection is still unknown, it has been generally accepted by the company that the norovirus has stemmed from employees that decided to still come into work while they were still sick, according to Bloomberg.

 

It has been announced that the investigation that was being conducted on the source of the E. coli virus has been concluded.

 

According to The Washington Post, the spreading of the norovirus has caused Chipotle to be subpoenaed by federal prosecutors and by the U.S. Food and Drug Administration who are conducting a criminal investigation.

 

This scandal cost Chipotle greatly. According to The Washington Post, in the fourth quarter of 2015, the company’s stock price plummeted 26 percent, and its sales fell approximately 16 percent.

 

Steve Ells, Chipotle co-CEO said, “It has been our aim to serve guests food that is safe, delicious, and wholesome, but the events of the last few months have shown us that we need to do better.”

 

Chipotle has gone through extensive measures to correct the issue. Their food preparation methods got a face-lift, and the company temporarily closed 43 of its locations in the Washington and Seattle areas.

 

Chipotle Late Opening

The company has also urged its employees not to come in to work if they are sick, and has funded a program to help farmers test the safety of the food they are providing to the company, according to Bloomberg.

 

In a public meeting with other Chipotle employees on Monday, Feb. 8, Chipotle co-CEO, Steve Ells, stated that they will be spending as much as $10 million to fund this new program.

 

Ells said, “The money will be used to provide safety support and education that’s necessary to meet our standards.”

 

The program is designed to help offset the cost that farmers would have to pay to conduct new tests and safety protocols.

 

It is the company’s hope that with this new program Chipotle will become a leader in the restaurant business in food safety.

 

During the company-wide employee meeting held on Monday, Feb. 8, all Chipotle Mexican Grill locations were closed until 3 p.m. so that employees could tune in to a pre-filmed broadcast via the Pericope app, according to Bloomberg.

 

To further apologize to its customers for the temporarily closed locations, Chipotle offered a free burrito voucher to anyone that texted, “RAINCHECK” to a temporary phone number up until 6 p.m. on that day.

 

As Time reported, although this was presumably good news for Chipotle fans, stock prices on that day still continued to fall. On that day, Chipotle’s stock fell almost another 4 percent.

It was also announced in this meeting that the company will be cutting back on local suppliers.

 

Chipotle has previously advertised their food as local grower friendly as means to attract more health-conscious customers.

 

Editor’s Note: Information from Time, The Washington Post and Bloomberg was used in this report.