Chipotle just lost its crown to a second-rate Tex-Mex shop

No bueno.
No bueno.
Image: Reuters/Andrew Kelly
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The last nine months have been nightmarish for Chipotle Mexican Grill. To add insult to injury, Americans now list Moe’s Southwest Grill—an Atlanta-based Tex-Mex chain—as their favorite fast-casual Mexican restaurant, according to a Harris Poll on the restaurant brands of the year.

It gets worse. Survey respondents reported they’d rather stand in line at Taco Bell, Qdoba and Baja Fresh before they’d consider Chipotle. It’s another sign the once irreproachable brand has a long road to recovery in the aftermath of a 2015 food safety crisis that sickened 60 people with E. coli across 14 states, hospitalizing 22.

“I think anybody who’s been to Moe’s would agree that Chipotle is better,” said Jason Moser, an analyst at The Motley Fool. “On one hand it is very indicative of the trouble that Chipotle put themselves into. There is no question that they deserve this.”

How long the chain will suffer remains the outstanding question. First-quarter sales at Chipotle locations open at least a year shrank 30% from the same quarter last year, the company said. Other chains have already declared that they are operating in a “post-Chipotle world,” even as they work to improve food safety within their supply chains.

Some analysts remain bullish that the chain can recover. Certainly Jack in the Box was able to after its food safety scare in 1993. But recovery will require regaining consumer confidence while luring customers in without reminding them of what scared them away in the first place.

“As long as [CEO] Steve Ells is steadfast in wanting to make sure this company succeeds, they are going to make sure this happens,” Moser said.

Only time will tell.