Chipotle Forced to Close Store Due to Outbreak

Chefs' Take: The Virginia store's closure is likely due to norovirus, not foodborne illness. Still, Chipotle's past continues to haunt it, and it's likely the chain will have to contend with this as long as it exists.
— Kristen Hawley

(Bloomberg) — Chipotle Mexican Grill Inc. suffered its worst stock decline in seven months after a suspected norovirus outbreak at one of its restaurants threatened to renew the company’s food-safety crisis.

The burrito chain closed a location in Sterling, Virginia, on Monday after a “small number” of illnesses were reported, according to Jim Marsden, Chipotle’s executive director of food safety. The company is working with health authorities to determine the cause of the outbreak, he said.

“The reported symptoms are consistent with norovirus,” Marsden said in an emailed statement. “Norovirus does not come from our food supply, and it is safe to eat at Chipotle. We plan to reopen the restaurant today.”

The move follows a series of foodborne-illness outbreaks in 2015 that sent Chipotle’s sales and stock price plunging. Though norovirus cases aren’t rare — about 20 million Americans are sickened each year — Chipotle’s past problems have put health incidents at the chain under intense scrutiny.

The stock fell as much as 7.6 percent to $362.40 on Tuesday, marking the biggest intraday drop since December. It had been up 3.9 percent this year through Monday’s close.

Even before news of the latest outbreak, Chipotle’s comeback bid has faced obstacles. This spring, a malware attack struck its point-of-sale technology. The Denver-based company said in May that it had successfully removed the malicious code from its systems.

Safety Chief

As it was trying to restore its image in 2016, Chipotle hired Marsden to oversee its food-safety efforts. The former professor in Kansas State University’s Animal Science and Industry Department has worked to revamp procedures at the Mexican-food chain.

The norovirus virus is typically spread from one person to another, according to the Centers for Disease Control and Prevention. But it can also be transmitted by eating contaminated food or water.

“We take every report of illness seriously,” Marsden said on Tuesday. “In accordance with our established protocols, our team is working to ensure the safety of our customers and employees, including voluntarily closing the restaurant yesterday to conduct a complete sanitation.”

That latest incident could spur investors to call for a chief operating officer — someone who could better monitor the company’s more than 2,000 restaurants — according to Mike Halen, an analyst at Bloomberg Intelligence. Chief Executive Officer Steve Ells previously had help from co-CEO Monty Moran, but that executive stepped down last year.

“This is not a small chain anymore,” Halen said. It could be “too much for one person to handle.”

 

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This article was written by Leslie Patton and Craig Giammona from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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