Embattled Chipotle's stock falls as another store closes for food safety
Investors may be growing wary of the Mexican food chain, which has been dogged by a series of food safety scandals.
Hopes that fast-food chain Chipotle could recover from a months-long string of food safety incidents took a hit Wednesday, as an employee's positive test for norovirus closed down a franchise in Billerica, Mass.
The chain decided to temporarily shut down the store as a precautionary measure. A company official said the store will go through a "full sanitization" and that no customers have been reported as sick.
But the latest incident is one too many for investors frustrated by the Chipotle's ongoing struggle with food safety. Stock prices fell to $506, down by 3.4 percent, by the close of trading Wednesday. Share prices have fallen 24 percent since last year, after previous outbreaks of food illnesses tarnished the Mexican grill's "food with integrity" reputation.
Up to 141 students at Boston College reported symptoms of norovirus after eating at a nearby Chipotle in December, prompting apologies from the chain's founder and co-Chief Executive Officer Steve Ells.
"This was a very unfortunate incident and I'm deeply sorry that this happened, but the procedures we're putting in place today are so above industry norms that we are going to be the safest place to eat," he told NBC.
In February, franchises across the United States closed for half a day, as all employees underwent safety training and managers emphasized the importance of staying home when they felt ill. The chain has outlined changes to improve produce testing, shelf-life testing, and to better monitor its supply chain.
For some customers drawn to Chipotle's claims as a more natural alternative to other fast food chains, however, patience could be wearing thin.
In January, the chain was subpoenaed in a federal investigation linked to norovirus in California last year that health officials say impacted more than 200 people.
More than 50 people in ten states were impacted by E. coli outbreaks in October and November. Another illness impacting 64 people in Minnesota was traced to salmonella in tomatoes Chipotle used in August.
"This is a fairly significant problem for Chipotle," Timothy Calkins, a clinical marketing professor at Northwestern University's Kellogg School of Management, told NPR last month. "The difficult thing for Chipotle is that, it's not that there was one incident ... it creates an overall perception, and it raises questions about safety."
This report includes material from Reuters and the Associated Press.