Denver, Colorado-based Chipotle Mexican Grill has appointed Burson-Marsteller as its new United States PR agency of record (AOR) as the company works its way back from a devastating repetitional challenge due to an E. coli crisis that battered its stock, sales and consumer confidence. Burson replaces previous AOR Edelman, that was taken off the Chipotle business last fall due to a conflict over a piece of business the agency gained.
"We are delighted to have been chosen by Chipotle to be their new communications partner and look forward to getting started," said Burson US CEO Michael Law in an email to PRWeek.
Chipotle closed 43 restaurants in Washington state and Oregon in early November 2015 in the initial outbreak. Those restaurants were reopened in the same month but more E. coli-related episodes occurred in California, Delaware, Illinois, Kentucky, Maryland, Minnesota, New York, Ohio and Pennsylvania. Washington state and Oregon were part of that second outbreak as well, with 27 and 13 people affected. According to the Center for Disease Control and Prevention (CDC), 55 people were affected as of January 27, 2016.
The Mexican restaurant chain has been focused on rebounding by enacting several food-safety measures and it closed a number of restaurants on February 8th to get employees up to speed.
Financially, the company has taken a significant hit as, last year, it posted a 6.8 per cent drop in Q4 2015 revenue from the same period in 2014. Q4 2015 sales were also down 14.6 per cent and net profits lagged 44 per cent. Despite the sluggish quarter, one bright sign is a recovery in share price — a 15 per cent rise since the CDC declared the E. coli outbreak over. However, analysts are not entirely sure that the company may not be able to truly recover from the crisis, indicating that the stock could drop another 24 per cent.