Chipotle plans marketing blitz to woo back customers
Chipotle Mexican Grill is ready to put its E. coli nightmare behind it.
The Denver-based burrito chain is planning a marketing and public relations blitz for early February, when it expects the Centers for Disease Control and Prevention to wrap up its multi-state investigation into the food-borne outbreak.
“We need to reassure our customers that this can’t happen again,” co-chief executive Steve Ells told analysts and investors at a conference in Orlando.
Chipotle will attempt to woo back customers with a campaign that includes direct mail and traditional advertising. The goal is “to tell our story about what happened,” said Mark Crumpacker, chief creative and development officer.
Top Chipotle executives made their pitch to a packed room at the ICR conference, closing out the three-day event, with many attendees sticking around just to hear what the former fast-food darling would say.
Some questioned whether February was too soon to declare an end to the crisis that has rocked the company for the past four months.
“I’m extremely confident,” Ells said, adding that “we will recover from this and win our customers back.”
Nevertheless, Chief Financial Officer John Hartung also warned investors that the company’s financial picture will be “messy in terms of earnings and revenues” this year.
Chipotle’s sales and stock price have been battered since the E. coli outbreak in late October and November that spread to nine states. That was followed by a norovirus outbreak at a restaurant in Boston that sickened more than 100 people.
The chain is also the subject of a criminal investigation tied to a norovirus outbreak at one of its restaurants in Simi Valley, Calif., that made more than 200 customers sick.
Chipotle’s food-safety issues actually stretch back to the summer, with reports of smaller salmonella and E. coli outbreaks linked to its restaurants.
Crumpacker only acknowledged the two most prominent incidents in his presentation to investors.
“We had two events: the E. coli instance in the Northwest, on top of that we had the norovirus incident in Boston, and consumers have been confused about those two things,” he said.
Chipotle also said it would close all of its stores the morning of Feb. 8 in order to communicate via video conference to its 60,000 employees about what steps it’s taken to test all of its foods and new food safety measures. Among the steps is to move all tomato and lettuce preparation to its central commissary.
Wall Street was encouraged by the news, bidding up Chipotle’s shares 5.94 percent to 428.28 on Wednesday. The stock has lost more than 30 percent of its value over the past few months.