E. Coli Outbreak Threatens Chipotle Sales As Victims Vow Not To Go Back To Mexican Restaurant


The recent outbreak of E. coli in several Chipotle restaurants in Oregon and Washington is set to cost the company not only its credibility as a fast food chain giant but also a large chunk of its sales as scared diners are likely to get their burritos somewhere else.

Health officials in Portland and Seattle have begun investigating the potential source of the E. coli strain that managed to end up in Chipotle's menu, sending 39 sickened diners to the hospital.

Initial reports said there were a total of 41 E. coli food poisoning cases but state authorities in Oregon later lowered the number cases by two to 10.

All 43 Chipotle stores in Portland and Seattle have been shut down since Saturday, Oct. 31. The Mexican fast food chain is currently conducting deep cleaning of affected outlets as well as testing and replacement of food supplies. It has also hired food safety consultants to help ensure the quality of its food options.

Analysts believe the closure of several of Chipotle's outlets and the negative impact of the outbreak on its image are bound to depress the company's sales.

"Even after the company sounds the 'all-clear,' we believe that it will take some time for traffic to return," Stephen Anderson, a restaurant analyst for the Maxim Group, said.

Anderson said Chipotle could experience a hit on its same-restaurant sales of up to 75 basis points for this quarter and around 25 basis points for the first quarter of 2016.

The food company's shares closed on Wednesday at $614.98. The stock had previously closed at a little over $750 during trading on Oct. 13.

Following the E. coli outbreak in Chipotle stores, the consumer watchdog Center for Consumer Freedom (CCF) used a full page newspaper ad to once again take a swipe at the food company.

"You can't spell 'Chipotle' without 'E. coli'," the newspaper ad read.

The CCF had ran a "Chubby Chipotle" campaign aimed at raising public awareness on the high calorie content of some of the dishes served by Chipotle.

Chipotle's "food with integrity" policy has earned the support of a loyal following, forcing other restaurant chains to rethink their strategies in food preparation. This policy requires all food options offered in Chipotle outlets to exclude meat taken from animals that have received antibiotics.

According to health officials, the E. coli O26 bacterial strain involved in the recent outbreak is known to cause only less serious illness in people, unlike the E. coli O157:H7 that caused the death of four children who ate contaminated hamburgers in a Jack in the Box store in the 1990s.

There are no reported deaths related to the E. coli outbreak in Chipotle outlets.

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