Chipotle just made its most desperate move yet to turn the company around

Burrito down!
Burrito down!
Image: Reuters/Lucy Nicholson
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First Chipotle Mexican Grill tried giving away free burritos. It also tried a rewards program. It even promised students free soda with their meals after school.

Apparently those deals didn’t spur enough sales to nurse the company back to health. On Sept. 21, the hobbled burrito chain tried a new strategy. It carved out prominent real estate on its website for a food safety section.

Sitting atop the new section is a video featuring Chipotle CEO Steve Ells extolling the virtues of the chain’s food standards to the tinkling backdrop of in-memoriam piano music. Early in the video, Ells acknowledges the 2015 food safety crisis that sickened dozens with norovirus and set sales into a tailspin.

It’s an aggressively head-on approach designed to appeal to customers and get them back in its food lines. Typically the last thing a food company wants to do is remind people that there was ever a safety problem in the first place. But there’s Ells at the 45-second mark, looking straight into the camera and telling the world, “In 2015, we failed to live up to our own food safety standards, and in so doing, we let our customers down. At that time I made a promise to all of our customers, that we would elevate our food safety program.”

Ells went on to describe the many things the company has done to correct itself. But the fact that Chipotle is addressing its failings in a video squarely aimed at consumers is telling. It comes after months of heavy discounts, free-burrito giveaways, and a marketing blitz aimed at getting people to join a rewards program. None of those measures moved the needle much in the direction of a full recovery—the company’s shares have fallen 45% in the last year and sales have remained stubbornly elusive.

The company is scheduled to present its next quarterly earnings report in mid-October.

As The New York Times points out (paywall), no restaurant chain has dealt with a food safety crisis of this magnitude during the age of social media. So in many ways, Chipotle is left swimming in uncharted territory.

Meanwhile, competition in the fast-casual restaurant space is much different than when Chipotle was founded in 1993. It’s now jousting against myriad other brands that tout the same high-quality food standards, including Sweetgreen and Panera Bread.