Apr 28, 2016

    Freebies fail to help Chipotle after safety scare


    CHIPOTLE Mexican Grill reported its first-ever quarterly loss, after food giveaways failed to lure back large numbers of paying customers turned off by food safety lapses last year.

    Sales at established Chipotle restaurants fell 29.7 per cent during the quarter as the company gave away more than six million free burritos and bowls of food, as well as nearly a million free orders of chips and salsa or guacamole, chief financial officer Jack Hartung said.

    He added that Chipotle plans to move away from freebies and towards buy-one-get-one-free offers.

    It is also planning deals designed to get its most loyal customers to return as frequently as they did before the food safety crisis, which included outbreaks of E. coli, salmonella and norovirus.

    Shares in Chipotle have lost about one-third of their value since food safety woes surfaced with news it had closed dozens of restaurants in the Pacific North-west due to an E. coli outbreak.

    Sales at established restaurants are down about 26 per cent so far this month.

    They bottomed in January, tumbling 36 per cent that month.