McDonalds is the largest restaurant company in the world with over 36,000 restaurants. Chipotle was in bankruptcy when it was purchased by McDonalds and sold years later for a large profit. It looks like Chipotle may be in deep trouble and I don’t think they will recover this time!
Chipotle Mexican Grill Inc., struggling to rebound from multiple outbreaks of foodborne illness, reported a bigger plunge in fourth-quarter sales than the restaurant chain expected and said it got served with a subpoena in a federal criminal investigation.
Same-store sales — a closely watched benchmark — tumbled 14.6 percent in the period, the Denver-based company said in a regulatory filing on Wednesday. The decline, Chipotle’s first quarterly drop as a public company, was previously projected to be as much as 11 percent. The grand jury subpoena, meanwhile, stemmed from a probe into a norovirus outbreak by the U.S. Attorney’s Office for the central district of California, which is working with the Food and Drug Administration’s Office of Criminal Investigations.
Chipotle’s reputation has been hammered in recent months by an outbreak of E. coli that afflicted at least 53 people in nine states. That was followed by a norovirus contagion at a Boston location that sickened more than 140 college students. A new spate of illnesses in three additional states was announced by the Centers for Disease Control and Prevention late last month.
The shares fell 5 percent to close at $426.67 in New York , reaching their lowest point in more than two years. The stock declined 30 percent in 2015.
In the wake of the Boston outbreak — and the national news coverage that followed — same-store sales fell 34 percent, the company said on Wednesday. After the CDC report on the additional E. coli cases in late December, the sales dropped 37 percent. They were down 30 percent for the full month of December, Chipotle said.
Check out the video here:
Well there goes a great idea with great food down the drain. I actually stopped eating Chipotle over a month ago but not because of the existing problems, I just got tired of it. Turns out I made a great choice.
H/T – Bloomberg
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