The Centres for Disease Control and Prevention (CDC) is investigating an outbreak of E. coli that appears linked to Chipotle Mexican Grill restaurants.
“5 ill people have been identified in Kansas (1), North Dakota (1), and Oklahoma (3),” the CDC said in a statement. “The illnesses started on dates ranging from November 18, 2015 to November 26, 2015. All five (100%) reported eating at a Chipotle Mexican Grill in the week before illness started.”
Shares of Chipotle are down 3% following the news.
Here’s Chipotle spokesman Chris Arnold on the CDC’s new announcement:
We have indicated before that we expected that we may see additional cases stemming from this, and CDC is now reporting some additional cases. Since this issue began, we have completed a comprehensive reassessment of our food safety programs with an eye to finding best practices for each of the ingredients we use. We are now in the process of implementing those programs, including high resolution testing of ingredients, end of shelf-life testing of ingredients, continuous improvement in the supply system based on testing data, and enhanced food safety training for all of our restaurant teams. With all of these programs in place, we are confident that we can achieve a level of food safety risk that is near zero.
Chipotle co-CEOs Steve Ells and Monty Moran discussed some of this with CNBC’s Jim Cramer last week.
“We’re going to layer on this culture of food safety and make sure that we’re the safest place to eat,” Ells said. “That’s priority number one.”
Since October, the Mexican food chain has been closing stores after diners became ill with E. coli after having eaten at the restaurant.
Initially affecting restaurants in just Washington and Oregon, news of similar illnesses were eventually reported in Illinois, Maryland, and Pennsylvania.
In a December 4 regulatory filing, management disclosed that the bad publicity was having an extremely negative impact on sales. Here’s management:
When we announced the closure of 43 restaurants on November 3, company-wide comparable restaurant sales dropped for the ensuing few days to approximately -20%. The severity of the national impact was temporary, and when we announced the re-opening of restaurants in Oregon and Washington on November 10, 2015, comparable restaurant sales over the next several days quickly improved to approximately -9%. On November 20, 2015 the U.S. Centres for Disease Control and Prevention (CDC) announced four additional cases linked to the same E. coli incident; following this announcement and related negative publicity, daily comparable restaurant sales trended down to approximately -22%. Over the past five days, comparable sales have gradually improved to an average of approximately -16%. For the full month of November, comparable restaurant sales were -16%.
The companies woes continued earlier this month after Boston College students fell ill after eating at the local Chipotle restaurant. What initially appeared to affect a handful of basketball players ballooned to 120 students becoming ill.
The CDC notes that the newest reports of E. coli involve a strain that they did not see in the previous outbreaks.
“Because it is not known if these infections are related to the larger, previously reported outbreak of STEC O26 infections, these illnesses are not being included in the case count for that outbreak,” they said.
“This investigation is ongoing.”
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