Chipotle poisoned some folks.
America’s love affair with “fast casual” darling Chipotle ended in a wave of severe nausea last year as a food poisoning outbreak that started in July spread to multiple states and sickened hundreds of patrons.
Since last summer, authorities have tied Chipotle to at least six outbreaks spanning two types of bacteria (E. coli and salmonella) and one virus (the “winter vomiting bug”).
As The Chicago Tribune recounts [5], the incidents “included one that started in October in Oregon and Washington and spread to seven other states, sickening more than 50 people by mid-November, [one in] December [in which] about 200 were sickened by norovirus after eating at a Chipotle in Boston, five cases of E. coli poisoning in Kansas, North Dakota and Oklahoma, five illnesses tied to one Seattle store in July, 100 illnesses [linked to] an outlet in Simi Valley, California,” and an unfortunate episode “in September [when] more than 60 fell ill in Minnesota.”
That’s a lot of sick people and as you might image, the stock fell ill as well, dropping some 40% since the first reported cases.
[6]
Now, the chain is set to hold a kind of ad hoc “try not to poison anyone” meeting on February 8, when all stores will close “for a few hours” so that management can “discuss some of the changes [its] making to enhance food safety, to talk about the restaurant’s role in all of that and to answer questions from employees.”
Yes, "questions from employees", who might ask if their jobs are on the line after same store sales collapsed [7] 30% in December and after the company was served with a Grand Jury Subpoena in connection with an official criminal investigation being conducted by the U.S. Attorney's Office for the Central District of California.
They might also be concerned with the dozens of lawsuits Bill Marler, a food safety litigator in Seattle, says he's about to file.
Perhaps management can calm employees' frayed nerves the same way they calmed the market: by explaining that buybacks will always cure what ails you.
[8]
(the magic of the buyback as seen on January 6)
