Chipotle Eyed in Outbreak of Different E. Coli Strain

Chipotle has warned that its fourth-quarter comparable-restaurant sales could drop by 8% to 10% from one year ago due to the outbreak. Built on a pitch of fresh, organic and locally sourced ingredients for its burrito wraps and tacos, the thriving United States chain is making clear it is not ready to ease up on expansion plans.

The Centers for Disease Control said Monday that it was looking into an outbreak of a different DNA fingerprint of Shiga toxin-producing E. coli that had sickened five people in North Dakota, Kansas and Oklahoma between November 18 and November 26th.

Five people became sick between November 18 and November 26 in the latest outbreak, according to the CDC.

All five (100%) reported eating at a Chipotle Mexican Grill in the week before illness started. They all ate at Chipotle in the week prior to their sickness.

According to a report from the Bloomberg, Chipotle Mexican Grill Inc., still reeling from recent outbreaks of E. coli and norovirus at its restaurants, is now being investigated for its link to a new spate of illnesses in three additional states.

The same month, more than 60 people got sick with salmonella poisoning after eating in one of 22 Chipotle restaurants in Minnesota.

“Chipotle’s food safety issues seem to have exposed deficiencies in the chain’s supply testing protocol, particularly as it – like Yum China – manages hundreds of small suppliers”, David Palmer of RBC Capital Markets said in a December 7 report.

“We have indicated before that we expected that we may see additional cases stemming from this, and the CDC is now reporting some additional cases”.

The CDC has not identified the ingredient that made people in the larger outbreak, which has already scared customers away and caused Chipotle’s sales to plummet.

Schaffner said the genetic differences between the bacteria in these two E. coli outbreaks were slight, but that it remains unclear whether they were related.

To begin its image rehabilitation, Chipotle last week took out full-page ads in 61 newspapers around the country apologizing for the illnesses.

Ivankoe noted that the impact of the 47 confirmed Chipotle cases initially appeared to be rather small, given that 265,000 E. coli cases occur in the US each year, a small part of the total of 48 million foodborne illness cases. The shares closed down 12.94 points or 2.28% at $554.89 with 1,143,569 shares getting traded.

Chipotle’s stock price fell to a 52-week low Monday following the news before recovering slightly.