Chipotle’s sales are sliding following an E. coli outbreak tied to its restaurants across nine states.
The company is expecting same-store sales to decline by 8% to 11% for the fourth quarter, and analysts say the slide could continue for at least another year.
To judge how long the damage might last, analysts for Oppenheimer compared Chipotle’s situation to a similar outbreak of E. coli illnesses linked to Taco Bell restaurants in 2006.
The Taco Bell outbreak sent the company’s same-store sales into negative territory for five straight quarters.
But things may be worse for Chipotle, according to Oppenheimer.
“While Taco Bell in 2006 is most relevant E-coli comparison, it was contained to shorter time-period, its source was quickly identified, and the brand was not built on ‘food with integrity,'” the analysts wrote in a recent research note.
“Despite these differences, [Taco Bell’s same-store sales] still hadn’t fully recovered three months after the CDC closed its case,” the analysts note. “The CDC’s case at [Chipotle] has been ongoing since 11/4/2015 and remains opened and unsolved.”
Oppenheimer is projecting that Chipotle’s same-store sales will decline 8% in the first six months of 2016 and rise 6% in the second half of the year.
JPMorgan analyst Jon Ivankoe has also projected that this is the beginning of a long slide for Chipotle.
Ivankoe has estimated that Chipotle’s same-store sales will fall 13% in the fourth quarter of this year, then decline 12%, 7%, and 4% in the first, second, and third quarters of next year.
Fifty-three people have been sickened in nine states as a result of the E. coli outbreak, and 47 of those people have confirmed eating at Chipotle before their illnesses started.
Chipotle has committed to making major changes to its food preparation and testing to improve safety going forward.
For example, the company will be moving some food preparation and testing to a central kitchen.
Tomatoes, cilantro, and lettuce are among the ingredients that will now being prepared in the central kitchen and shipped to restaurants in plastic bags, The Wall Street Journal reported.
Cooks will also take extra measures to kill germs, such as dipping onions in boiling water before they are chopped and adding cilantro to hot rice to get rid of microbes, according to the Associated Press.
The company told Business Insider it may start scaling back on its use of local ingredients, as well, because smaller suppliers will most likely have difficulty meeting its new standards for food safety and testing.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.