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Old 17-03-2016, 09:03 AM posted to,sac.politics,,,,
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Default [Bloomberg] Chipotle Faces No-Win Scenario as Crisis Taints Its Every Move

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Chipotle Mexican Grill Inc. responded quickly when four of its
workers called in sick last week with suspected cases of norovirus.
The Boston-area restaurant was shuttered for cleaning, and no
customers got ill.

The company’s management considers that a successful outcome -- a
sign its updated health protocols are working. But customers, still
wary of the chain after a string of outbreaks, didn’t see it that

Headlines about the Massachusetts restaurant closing once again sent
Chipotle’s sales plunging. And while the company called that sales
decrease a “blip” on its road to recovery, the incident illustrates
just how difficult it will be for the chain to get its mojo back.

“It’s great that they caught it before anybody got sick, but how
could it happen again?” said Christopher Muller, a restaurant and
hospitality expert who teaches at Boston University. “They’re caught
in a very bad cycle.”

Chipotle sales tumbled 26 percent in February, marking at least the
third straight month of declines for a chain once known for intense
customer loyalty. Sales had started to recover a bit in early March,
but then sank 27 percent in the week following the Boston situation.
The company called that incident a “nonevent” and said it only
became public because parents of one of the workers called the

Bigger Spotlight

The company’s vigilance in closing the restaurant for a full cleaning only threw a bigger spotlight on the situation.

“We’re really proud of the protocol working perfectly,” Steve Ells,
the company’s co-chief executive officer, said Wednesday during an
investor presentation. “Unfortunately, it was spun to be a negative,
but nonetheless we’ll still continue -- out of an abundance of
caution -- to make sure that we’re going the extra steps to be

Chipotle executives reiterated Wednesday that they’re confident the
company can restore its sales and profit. But it’s going to take
time. Facing its second straight negative sales quarter, the company
is now forecasting a loss of $1 or more per share in the first
quarter. Costs for new food-safety measures and promotion are higher
than predicted, said the company, acknowledging that fallout from
the crisis is far more damaging than initially expected.

Safety Czar

The company has hired a new director of food safety and says its updated protocols will reduce the risk of a new outbreak to “near zero.” Still, it’s not clear that customers are getting the message.

The company hasn’t been strong enough explaining what it’s doing to
improve food safety, said Richard Frisch, a partner at Forum
Strategies and Communications. His two college-age sons -- once
loyal Chipotle customers -- have stayed away from the restaurants
since the crisis hit, he said.

“The message hasn’t gotten to them,” Frisch said. “They have to do
more to get positive word of mouth and change the conversation.”

Free-burrito offers -- sent to customers’ mobile phones and through
traditional mail -- have drawn some customers back to Chipotle’s
restaurants. But the chain faces a deeper question about the
strength of its brand. A generation of U.S. consumers grew up with
Chipotle as the go-to option for better fast food, a place to grab
a quick burrito made with the type of premium ingredients coveted
by the foodie crowd.

‘It’s Deserted’

Getting that image back will be difficult, particularly as negative
headlines and pictures of empty restaurants keep popping up on
social media, said Allen Adamson, the former North American chairman
of the branding firm Landor.

“They can solve the health issues, but getting that momentum back is
very tricky,” he said. “There’s a fashion dimension to the food
business -- when a place is packed, you want to try it. You see them
now, it’s deserted. It looks like a bowling alley.”

Chipotle’s crisis began in earnest last November, when the Centers for Disease Control and Prevention said it was investigating an E. coli outbreak linked to the chain. That brought national attention to a series of previous illnesses among customers, including a norovirus outbreak in California that sickened more than 200 people. A month later, scores of Boston College students got the virus after eating at a local Chipotle.

Stock Hammered

By March, Chipotle had mostly been out of the news for the better
part of a month. Then workers at a different Massachusetts location
got sick. Once again, the company’s stock price fell. The shares are
down more than 26 percent over the last 12 months, a plunge that has
wiped out more than $5 billion in market value.

Norovirus is the most common foodborne illness in the U.S.,
according to the CDC. From 2009 to 2012, almost two-thirds of cases
from food contamination were linked to restaurants.

It’s likely that other chains have had workers get sick with
norovirus in recent months without generating media attention, said
Ben Chapman, a food-safety expert and professor at North Carolina
State University. Chipotle, however, remains firmly in the spotlight
as it tries to restore its reputation.

“This is norovirus season -- it’s really not that unusual,” he said. “But there’s heightened awareness with Chipotle because they’ve had so many incidents.”

Which title has a better ring to it?
_ President Hillary
_ Prisoner Hillary

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