Chipotle Falls Again as Norovirus and Mice Steal Spotlight

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Chipotle has enlisted RZA for a music-themed promotion, but news keeps getting in the way.
Chipotle has enlisted RZA for a music-themed promotion, but news keeps getting in the way. Credit: Chipotle

Chipotle Mexican Grill Inc.'s rough week isn't over yet.

Shares of the burrito chain fell for a fifth day after it was hit by a fresh wave of damaging reports, dragging the stock down to its lowest level since last November. The number of people who claim to have been sickened by a Chipotle location in Virginia has now climbed above 130. And in Texas, customers complained to local news about rodents dropping from the ceiling of a restaurant.

The negative headlines have tarred what was supposed to be a marketing coup for the Denver-based company. It rolled out a new campaign on Wednesday featuring RZA of the Wu-Tang Clan, aiming to tout the quality of the chain's ingredients.

Instead, investors have focused on the mounting number of suspected norovirus cases. The outbreak first came to light after Chipotle closed a location in Sterling, Va., on Monday, citing a "small number" of illnesses. But the tally could be much higher. Patrick Quade, who runs the website, told The Wall Street Journal that 133 people now say they were sickened after visiting that Chipotle.

The company reopened the restaurant on Wednesday after it was sanitized. In response to the incident, CEO Steve Ells pointed to the steps Chipotle has taken to safeguard customers' health, including hiring a food-safety director and updating its protocols.

Chris Arnold, a spokesman for Chipotle, also noted that the Iwaspoisoned site may not be the most accurate way to measure the scope of an outbreak.

"The site relies on user-generated data, and there is no medical or clinical verification for that," he said.

The Loudoun County Health Department, which is investigating the matter, said on Thursday that it had identified about 60 people who fell ill after eating at the Chipotle in Sterling. One of the customers has tested positive for norovirus, said David Goodfriend, director of the agency.

Heavy scrutiny
Norovirus outbreaks aren't uncommon, with about 20 million Americans getting stricken by the virus each year. But Chipotle is under heavy scrutiny after a series out of E. coli and norovirus outbreaks tarnished the chain's reputation in 2015. That history has put a harsh glare on each subsequent health incident.

The stock fell as much as 3.7% to $359 on Thursday, extending a streak of declines that began last Friday. The rout erased Chipotle's gains for the year.

In Dallas, customers told the local NBC affiliate that rodents fell from the ceiling of a Chipotle restaurant on Tuesday. Video of the mice skittering across the floor was posted, kicking off another wave of negative publicity.

Arnold blamed the incident on mice getting inside through a structural gap in the building. He called the situation an "extremely isolated incident."

"Management immediately removed them and the gap has been repaired," Arnold said. "We've been in touch with our guests to offer our sincere apologies."

-- Bloomberg News

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