Chipotle food-contamination update: No news is bad news

chipotle exterior

The Chipotle Mexican Grill in Great Neck, N.Y., is 2,877 miles from the branches in the Pacific Northwest where 19 guests were sickened by the E.coli 0157:H7 bacterium, but that wasn’t far enough for the restaurant’s usual clientele.

At lunchtime yesterday, a day after news of the outbreak spread through the major media, all of eight customers were having a late lunch in the usually bustling restaurant. About the same number were eating next door in a unit of a local burger chain, Cheeburger, Cheeburger, and two doors down in a Chinese indie called Wild Ginger, neither of which promises food with a difference.

Wall Street was thrown into a selling fit by news of the food poisonings, bidding down the value of Chipotle’s shares by 5 percent at one point (it rallied to close at a loss of about $17, leaving shares at the still-nosebleed height of $623.40 each). But the extent of lingering damage to the brand—the traffic-flattening fear of contamination—remains to be seen.

Right now, customers and the home office are in limbo. Health authorities have not disclosed details after announcing that the contamination had been tied to six Chipotles in Oregon and Washington. The chain immediately closed all 43 of its stores in the affected regions for the sake of safety, and they remained shut yesterday. The past has shown that such prudence doesn’t buy much good will from the public.

“We are taking this very seriously and still investigating all the details,” the chain said in a tweet to Restaurant Business. 

Analysts noted that the shuttered stores account for about 2 percent of Chipotle’s stores in the United States.

Few new details have emerged about the outbreak since the poisonings were first detected last week. Chipotle assured consumers via Twitter that it would let them know when the Northwestern stores reopen. Meanwhile, a few internet reports indicated that health authorities have surmised the danger to consumers has passed, though none were quoted.

Others noted the common occurrence of more victims coming forward as a result of the publicity. In past food-contamination instances, people have stepped forward as the news spread, explaining that they hadn’t connected a recent illness with the outbreak until they read or heard that other people suffered the same symptoms. Then there are the bounty hunters who smell a chance for a windfall from a legal settlement.

Other cases coming to light could prolong the negative attention and continue to dampen customer counts at the Chipotle in Great Neck. “This issue may grow in significance if there are more reports of food-borne illness by CMG customers in other states (especially CA where CMG has about 18% of its restaurants) or if the health condition of the afflicted customers worsens,” noted a report from Joe Buckley, the restaurant analyst for Bank of America Merrill Lynch.

To date, eight of the victims have been hospitalized.

Ironically, Chipotle’s closest competitor, Qdoba Mexican Eats, had its own food-safety problem yesterday. News broke of three customers contracting typhoid fever, a virulent and often fatal disease, at a Qdoba in Firestone, Colo.



The contamination occurred in August but had not been publicized by health officials, for reasons that were not presented. All three victims have recovered, and the infection was traced to a food handler who was not sickened by the pathogens he carried.

Qdoba, the sister concept to all-time-worst-E.coli-victim Jack in the Box, has yet to respond publicly to the news.

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