Chipotle had its most difficult year ever in 2015.
Customers dumped the fast-food chain after E. coli and norovirus outbreaks in the fourth quarter.
And on Tuesday evening, the company’s quarterly results showed that same-store sales fell 14.6%, the first time in a decade that sales were negative in a quarter.
And so in just a few months Chipotle has gone from being one of the healthiest food options out there to one that people avoid.
But the hardest reality for the company is that fewer customers see it as a healthy food option.
Analysts at Bank of America Merrill Lynch surveyed more than 1,000 customers to understand how they were responding to the health scares, publishing the results in a note on Wednesday.
BAML’s Joseph Buckley and Gregory Francfort wrote: “Our recent survey also shows a clear negative shift in the perceived healthiness of the brand from survey results last June. Respondents who viewed Chipotle as a healthy food option fell to 32% (from 44%), as an unhealthy option rose to 16% (from 11%), and as neither particularly healthy nor unhealthy rose to 52% (from 45%).”
This, of course, is a major problem because Chipotle’s brand perception as
the cool and healthy fast-food option was its big selling point over rivals like McDonald’s. Though this was really only ever the result of some marketing genius.
As a food industry researcher told Business Insider’s Ashley Lutz last year, it was always sort of amazing that they convinced people that 1,300-calorie burritos were healthy. And now with health scares like an E. coli outbreak and norovirus issues plaguing the company, this veneer wore off.
Now, the company is set to launch its most expensive marketing campaign ever to “aggressively” welcome customers back.
Bank of America analysts think sales should improve with the passage of time if there are no more issues and raised their rating on the stock to “Neutral” from “Underperform.”
Chipotle shares fell by as much as 7% in pre-market trading on Wednesday, and are down more than 25% since news of the E. coli outbreak was first revealed in October.
Business Insider Emails & Alerts
Site highlights each day to your inbox.