Free burritos helped, but Chipotle sales still not recovered from outbreaks

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It took Chipotle nearly two years, but its sales had almost recovered from several food-poisoning outbreaks that plagued its stores—and its customers—in late 2015. After a lot of reparations in the form of free burritos, sales earlier this year were nearing pre-outbreak levels. But then in July, norovirus turned up in a Virginia Chipotle.

Both Chipotle’s diners and its sales—once again—started looking weak. And, after closing and sanitizing the affected Sterling, Va. store on July 17, Chipotle—once again—offered its apologies and reassurances nationwide in the form of BOGO burritos. But successful damage control has still left Chipotle a long way from its pre-scandal glory days.

After the February 2016 burrito promotion began, battered sales finally started climbing. By early 2017, monthly customer spending showed promise and, as of June, year-to-date sales were down just 5 percent from healthy 2015 levels. But the latest outbreak derailed sales in July and August, which were down 12 percent and 14 percent, respectively, compared to 2015. September sales, however, were down only 8 percent from 2015. While the worst appears to be over, Chipotle has yet to match the sales benchmarks it reached before the original outbreaks.

The summer drop in customer spending was visible nationwide, though most noticeable in the D.C. area, where sales fell 25 percent in the two weeks after the outbreak. Sales have since started edging upward again, thanks in part to in-store promotions. Within days of the outbreak, Chipotle offered a free-burrito coupon that expired at the end of the August. Then, in mid-September, Chipotle enjoyed a sales boost when it added queso to the menu. But it was short-lived, and the cheese earned lukewarm press reaction.

In the first weeks post-outbreak, the eastern U.S. regions saw sales fall faster and more drastically than in the rest of the nation. The South, which is home to the affected Virginia store, suffered most. Its sales two weeks after the incident fell 12 percent from pre-outbreak levels. The impact of the outbreak seemed to blow over faster in the Midwest and West, where sales were less affected and recovered more quickly.

Chipotle has been outbreak-free for the past three months, increasing public confidence in its explanation that Sterling was an isolated incident. So while customers seem to trust that Chipotle has cleaned up its act, the question remains: what will it take to get Chipotle’s sales looking healthy again?

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