Brief:
- Burrito chain Chipotle triggered complaints on social media this week after a free guacamole promotion ran into technical problems. Many customers said Chipotle's website and mobile app crashed when they tried to place orders, according to Business Insider.
- Chipotle had planned to celebrate National Avocado Day by offering free guacamole to customers who placed orders through the Chipotle app or website while using the coupon code "AVOCADO." As people swarmed Twitter with complaints, the company responded with a tweet to explain that it was working on getting its computer servers back up. Chipotle normally charges extra for guacamole, but the chain extended the giveaway to Wednesday to make up for the botched mobile campaign.
- This comes on the same day as a Chipotle location in Powell, Ohio, planned to reopen after 170 customers reported becoming ill, which spurred a temporary closure. Previously, the company has struggled with several high-profile food safety issues.
Insight:
Chipotle's guac gaffe shows the importance of making sure that apps and website servers can handle a sudden large jump in user traffic. While some customers were unable to order through the website and app, others had trouble entering their ZIP code information to find a nearby Chipotle location. The burrito chain appeared to resolve its technical difficulties later in the day — and extended the promotion an additional day to Wednesday — but the damage to the brand's reputation had already been done.
Chipotle's reputation seemed to be improving in recent weeks, but the outage and the store closure has put the company back on shaky ground. News of the illnesses sent the chain's shares down as much as 8.5% as investors grappled with another round of negative headlines. Before this week's incidents, Chipotle showed signs of regaining consumer trust, reporting revenue that increased 8.3% on the strength of digital sales growth. The shift to digital sales and operational improvements helped to boost sales, according to Andy Barish, an analyst at Jefferies.
Chipotle's high user traffic on Tuesday was one sign that customers were willing to look past the latest food-safety scare, even as the company's been mired with several similar cases in recent years. CEO Brian Niccol, who took over in March after joining the company from Taco Bell, will likely try to get ahead of this week's incidents and demonstrate more transparency and accountability to reassure customers that Chipotle is responsive to their concerns. Prior management's efforts to boost store traffic with discounts and coupons after food safety scares were mostly ineffective, Cowen analyst Andrew Charles told Ad Age. He recommended that the company clarify what happened and explain its strategy to avoid embarrassing reoccurrences.
