Dive Brief:
- The latest hit to Chipotle's brand happened yesterday when it was forced to close a Boston-area restaurant after four employees called in sick with norovirus, a highly contagious infection that was part of other restaurant closures (along with E. coli) that started last fall.
- The restaurant chain was praised by a health official for immediately closing the restaurant upon discovering employees at the same location became ill at the same time.
- Chipotle is in the middle of a brand rehabilitation effort that started after the initial run of cases across the U.S. died down after the start of this year. Chipotle closed all of its restaurants on February 8 for a company-wide meeting on food safety designed to inform employees and demonstrate a good faith effort to get past the issue to its customers.
Dive Insight:
Right when things seemed to be rebounding for Chipotle — at least in terms of avoiding any news that could bruise an already tarnished brand — the infection-related closure of the Boston-area restaurant is a real setback for the brand’s image, as well as Chipotle’s stock price. After the news, shares fell 3.47% at close yesterday, and are down 22% year-over-year after a small rebound during the brand rehabilitation campaign conducted over the last month.
Last year was a rough one for a number of brands: Subway took a big reputation hit when its longtime spokesman Jared Fogle was arrested in a child pornography scandal, while automaker Volkswagen was found to be bypassing clean air standards across the globe with its line of “clean diesel” vehicles. The issue harmed not only the Volkswagen brand, but even affected Germany’s reputation.
It will be interesting to see what steps Chipotle now takes from a reputation management perspective. The current campaign gave customers the sense that it faced a problem and got past it, but with the same issue cropping right back up, Chipotle is facing a major public relations and brand management challenge, to say nothing of the root of the problem — food safety.
