Last month, when commenting on Chipotle’s third food contamination scandal in as many months, one retail analyst told Reuters not to expect a lengthy downturn for the fast-casual chain. “Short term they will take a hit but it will blow over quickly,” he said, adding, “They have a lot of customer goodwill.”
Many of those warm feelings have to do with Chipotle’s carefully cultivated image as the feel-good alternative to fast food. Over recent years, the company had seen stellar revenue growth and become into the face of the fast-casual movement, where consumers, particularly millennials, will pay a little bit more for seemingly better, more customizable food.
But as we noted last month in the wake of an E. coli outbreak that made dozens of burrito lovers in nine states sick, “Part of what makes this series of food contamination outbreaks so damning is that the company markets itself so aggressively as a quick-service purveyor of responsible food.”
Fast forward four weeks and add a norovirus outbreak at a Boston College Chipotle, which has made as many as 120 students ill and the goodwill seems to have vanished. “Chipotle’s shares are down 22 percent over the last four months, the worst performance among restaurant companies in the Standard & Poor’s 500 Index,” Bloomberg reported. “The shares fell an additional 5.6 percent...on Tuesday after the latest reports about Boston College.”