The Bad Chipotle News Isn't Over: The Feds Are Digging Deeper Now
While the CDC declared the devastating E. coli outbreaks linked to Chipotle officially over, the fallout from the food-borne illness disasters appears to be only getting worse, with news that a federal criminal investigation into the company's food safety practices has expanded.
In a press release on its quarterly earnings report, the burrito-slinging chain said Tuesday it received a subpoena broadening the scope of the previously disclosed federal criminal probe by the U.S. Attorney’s office for the Central District of California into a norovirus outbreak that sickened more than 200 people (including employees) at a Chipotle restaurant in Simi Valley, California. The subpoena, dated January 28th, requires Chipotle to hand over documents and other information related to food safety across the entire companydating back to January 1, 2013, instead of just the single location. Chipotle said it will fully cooperate with the investigation, which is being conducted by the Food and Drug Administration’s Office of Criminal Investigations.
But the new development suggests Chipotle's crisis isn't over. In a statement, Co-CEO Monty Moran said he anticipates a rough 2016, but remains confident the beloved fast-casual chain will make a comeback.
“2016 will be a very difficult year relative to our past performance," he said. "But, by staying true to our food culture and unique people culture, and layering on our rigorous food safety program, we are confident that we are now in a position to aggressively welcome customers into our restaurants and restore customer confidence in the things that make Chipotle great. With our full commitment to becoming an industry leader in food safety, and our continued focus on delivering an exceptional customer experience, we are confident that Chipotle will emerge as an even stronger company."
The earnings report also illustrates the enormous dent the food-borne illness scares put in Chipotle's business in the fiscal quarter that ended Dec. 31, 2015. When compared to the same quarter in 2014, Chipotle's restaurant sales dropped by 14.6% and its revenue decreased 6.8% to $997.5 million, and worse yet, its net income for the quarter was $67.9 million, or a decrease of 44%.
The earnings report comes just as Chipotle ramps up its push to lure customers back to its restaurants (potentially with free food!), and just days before the company will close all of its restaurants for a few hours on February 8th for new food safety meetings and training.
"We are extremely focused on executing [the new food safety] program, which designs layers of redundancy and enhanced safety measures to reduce the food safety risk to a level as near to zero as is possible," Chipotle's found and other co-CEO, Steve Ells, said in the release. "By adding these programs to an already strong and proven food culture, we strongly believe that we can establish Chipotle as a leader in food safety just as we have become a leader in our quest for the very best ingredients we can find."
Basically, it’s safer now than ever before to eat a Chipotle burrito. And they really hope you will.
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