Chipotle might be wasting millions of dollars on free food

Chipotle just released a letter admitting that the company doesn’t know if its burrito giveaways are driving sales.

On Wednesday, a letter from Chipotle to the Securities and Exchange Commission was released. The correspondence, first covered by Bloomberg, revealed the company was unable to measure any revenue gained from the roughly $70 million in free food coupons the company gave away from February to May.

“Promotional offers of free food do not directly impact revenue,” reads the letter. “Furthermore, given the unusual sales trends resulting from the food borne-illness incidents, we were unable to calculate or accurately estimate any indirect impact that promotional activity had on revenue.”

The burrito chain has been struggling to attract customers following an E. coli outbreak that impacted locations in 14 states. While the outbreak was declared over in February, sales have remained down, with the chain’s same-store sales dropping 30% in the first quarter of 2016.

Chipotle has pointed to redemption rates of free food coupons as evidence of the promotions’ success in the past. However, this letter reveals that, as of July, the company had not yet found a way to translate coupon redemption rates into understanding if the business is actual recovering.

Despite this, Chipotle isn’t slowing down on its giveaways. Earlier in August, the company announced it was launching happy hour specials, offering half-price drinks and two-for-one drink specials in eight states.

NOW WATCH: How to get a ton of food at Chipotle for under $5

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