Tuesday, July 31, 2018

Chipotle scrambles to address new outbreak and server outage

Guacamole lovers might be spending “National Avocado Day” anywhere other than Chipotle.

More than 170 people fell ill after eating at a Chipotle location in Ohio, prompting the chain to quickly close the restaurant after the news surfaced.

Business Insider reported:

A total of 105 reports were made to the website iwaspoisoned.com, indicating that more than 170 customers fell sick after eating at the Powell, Ohio Chipotle since July 29, according to Patrick Quade, the website's founder.

The website saw a surge in reports following Business Insider's report late Monday that the company had shut down the restaurant due to customer illness reports.

[FREE GUIDE: 3 things you (probably) didn't know about crisis communications]

Reuters reported:

Chipotle was informed of two customer complaints of illness at its Powell restaurant, Laurie Schalow, the company’s chief communications officer, said in an email.

“We acted quickly and closed this single restaurant out of an abundance of caution yesterday. We are working with the local health department and we plan to reopen this restaurant today,” Schalow said on Tuesday.

The recent crisis follows Chipotle’s efforts to rebuild its reputation following norovirus outbreaks in locations throughout the nation.

Bloomberg reported:

The latest round of negative headlines comes amid renewed optimism on Wall Street that the chain can mount a comeback under Chief Executive Officer Brian Niccol, the Taco Bell veteran who took over in March. Prior to Tuesday, the Mexican chain had been recovering from a food-safety crisis that battered its brand. Chipotle recently posted same-stores sales that beat estimates for the second quarter as Niccol starts to reshape the company, with new menu items, increased marketing, a delivery push and store remodels.

The recent crisis also sent Chipotle’s stock tumbling.

USA Today reported:

The chain continues to grapple with the financial implications of the 2015 crisis, which triggered a federal investigation and prompted the company to implement new safety standards and food-handling procedures.

The company's stock was trading at about $437 on Tuesday, which is up about 50% from the start of the year but still down more than 40% from pre-crisis levels.

Reuters reported:

The company’s shares were down 5.6 percent at $439.60, erasing gains made since Chipotle reported stronger-than-expected profit and same-restaurant sales for its second quarter on Thursday.

Chipotle’s social media team has been reaching out to consumers tweeting that they might be sick from its food with replies such as the following:

However, the team might be overdoing it:

Besides online responses, the Ohio outbreak marks the first crisis that the fast-food chain’s new chief has to handle.

USA Today reported:

The Ohio restaurant closure marks newcomer "Brian Niccol's first test as CEO," Cowen stock analyst Andrew M. Charles wrote Tuesday. Niccol, a former CEO of Taco Bell, became CEO of Chipotle in March, promising a digital innovation, new menu items and appeal to young diners.

The primary concern for the company surrounding the Ohio situation is likely the threat of renewed perception among customers that the food is unsafe.

Reuters reported:

“If this story gains traction, it might have more serious implications for the stock. It certainly, at this point, it’s a negative. I think it is something the CEO should address,” Maxim Group analyst Stephen Anderson said.

National Avocado Day sours with technical issues

Though the Ohio outbreak could take a swing at Chipotle’s reputation management efforts, it’s taking another hit as consumers lashed out over a malfunctioning code and server issues for National Avocado Day.

On July 26, Chipotle’s social media team tweeted:

On Tuesday, Chipotle tweeted reminders of its promotion:

However, within hours, consumers complained that the coupon code wasn’t working on either Chipotle’s app or website—rendering the discount invalid. Soon after, the website crashed.

The snafu brought fresh criticism:

Chipotle tweeted that it was working to restore its servers as quickly as possible:

However, some consumers said it was too little, too late—and additional complaints continued to pour in.

How would you advise Chipotle’s communications team to handle these crises, PR Daily readers?

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