Chipotle Crisis Case Study
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In the last quarter of 2015, a string of salmonella and E. coli outbreaks plagued the Chipotle restaurant chain, badly damaging the company’s reputation. As a result the company launched a crisis communications campaign to mitigate the damage and regain the public’s trust. The company faced criticism when at first relying on a closed system approach, alienating its customers. The company then used an open system approach, using press releases, a landing page, a nationwide employee meeting and promotional incentives to share …show more content…
The crisis was particularly damaging because the crisis was a contradiction of one of the company’s key messages, “food with integrity.” Additionally, while the company made several announcements to ensure the company that it was committed to making its restaurants safe, additional outbreaks occurred following those announcements.
While Chipotle did follow many best practices in using an open system approach, its crisis communications strategy was not able to prevent a significant loss in sales and customers. During the crisis, which occurred during the fourth quarter of 2015, the company saw decreases in revenue, sales, its operating margin, net income diluted earnings per share despite having opened 79 new restaurants. As a result, the restaurant began to offer a variety of incentives to woo customers, improve its image and increase sales.
Incentives were announced in a series of press releases and included games that rewarded customers with free chips and guacamole and a free drink promotion for students. During the initial outbreak, 80 college students who had eaten at Chipotle reported health issues to their college’s health system. The company also offered as an incentive free kids’ meals on …show more content…
This begs the question of what Chipotle could have done differently to avoid such extreme damage to its brand. Some might recommend that Steve Ells, the company’s founder and co-chief executive officer, should have apologized formally to the public immediately rather than waiting until nearly three month after the crisis began. Additionally, while the restaurant chain did take steps to provide information on how food safety issues were being remedied, many public relations professionals criticized the restaurant for not providing enough information and for not being specific about the measures that were being