The popular Mexican-food chain Chipotle’s bad year in 2015 might only be the beginning of its troubles: not only has its stock fallen around 40 percent in the last three months alone, its sales in December were down around 30 percent.
According to the Washington Post, the company’s initial estimates for the drop in sales weren’t severe enough.
Due to its recent e.coli and norovirus controversy, which has cause them to temporarily close dozens of locations, by the end of 2015, Chipotle posted a 15 percent overall decrease in sales for the quarter. Their expected decrease in sales was somewhere around 11 percent.
More than that, Chipotle announced in December that it had been served with a grand jury subpoena. The subpoena is linked to a norovirus breakout which occurred in August at a restaurant in Simi Valley, Calif., and will subject the restaurant chain to an investigation by both the FDA and the U.S. attorney’s office in California.
This comes as somewhat of a shock, as the company had experienced a long period of sustained growth and was considered by many to be a seemingly perfect business model. The recent scandal has been the first time Chipotle has fallen on hard times.
Last fall, things began when Chipotle was forced to close 43 restaurants in Washington state and Oregon in connection to an E.coli outbreak. Similar stories began popping up in Illinois, Pennsylvania and Maryland.
A report issued by Food Safety News claims that more than 500 people got sick due to eating at Chipotle — all in the second half of 2015.
In response to this controversy, however, Chipotle has claimed that it will make strides to better protect its customers in the future. The company says it will further sanitize its operations, hire food safety consultants and subject the testing of its ingredients to more serious scrutiny.