While the former thanks America’s farmers and ranchers for producing food for its stores and donates millions to support students in agriculture, the latter has continually spread false information about modern beef production, used fear and emotion to drive sales, and most recently has been slapped with plunging sales after an E. coli outbreak linked to its restaurants in October and November.
Advertisement
The Denver fast casual chain said in a filing Wednesday with the Securities and Exchange Commission that the subpoena from the U.S. District Court for the Central District of California received in December was for a “broad range” of documents related to the norovirus incident from August of past year.
The fiasco caused Chipotle sales to shrink as much as 14% in the fourth quarter of 2015 marking the first decline in its corporate history since the company’s initial public offering in 2006 as mentioned by ABC News.
This isn’t the first lawsuit Chipotle has faced over the last several months.
The embattled burrito-making giant is bound to get seriously grilled by federal authorities as the 1,900-strong food chain becomes a subject of criminal investigation regarding its alleged mishandling of a norovirus outbreak that occurred at one of its restaurants in central California.
“Any more incremental bad news, particularly if there is an unfavorable verdict from the grand jury, will place even more pressure, not just on the bottom line result but potential further damage to the brand, which in turn hurt sales”, Anderson said.
The subpoena arrived in December, the same month that a different Chipotle restaurant in Brighton, Massachusetts, was the site of another norovirus outbreak.
Chipotle said sales trends “may be significantly influenced by further developments”.
“We intend to fully cooperate in the investigation”, the company stated in the filing.
The cause of the E. coli outbreak has not yet been identified… The company spokesman’s only comment clarified that the subpoena was for the Simi Valley case.
Beach also noted that Chipotle had not contacted the county about the illnesses until Saturday Aug. 21, after it had shut down the restaurant in Simi Valley for sanitation and reopened it. Beach said he believed the company was aware of sick employees the previous Tuesday.
Advertisement
“I’m scratching my head about it”, he said. The government’s involvement is part of an overall strategy to focus on food safety.
