shuts U.S. stores for food safety meeting, rivals pounce
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[February 09, 2016]
By Siddharth Cavale and Subrat Patnaik
(Reuters) - Chipotle Mexican Grill closed
all of its U.S. restaurants during prime lunchtime hours on Monday to
hold staff meetings on food safety guidelines, sparking offers from
rivals eager to poach customers of the burrito chain as it recovers from
several food-borne outbreaks.
More than 50,000 Chipotle employees crowded into rented movie
theaters and other locations to hear live video feeds of co-Chief
Executives Steve Ells and Montgomery Moran laying out their program
to improve restaurant safety.
They described plans, already outlined to investors, to central
processing of ingredients like tomatoes and bell peppers, increase
testing of ingredients and to discourage sick workers from coming to
the restaurant by offering paid sick leave.
Chipotle's shares have lost nearly a third of their value and sales
have plunged about 30 percent since November, when first reports of
E. Coli sickness linked to the chain emerged. E. Coli sickened more
than 50 people in 14 states.
Chipotle also faced two separate norovirus outbreaks, and the
company said earlier this month it was the subject of a national
criminal investigation, related to an outbreak.
Ells said he was deeply sorry that some people became ill after
eating at Chipotle and was "committed to make sure it won't happen
again," according to company tweets.
Posters on Chipotle store windows offered a free "raincheck" burrito
to customers who could not get lunch.
Still, rivals including online food delivery service GrubHub and
Moe's Southwest Grill, sought to grab customers. "We're open,
especially on February 8," Moe's wrote in an ad on twitter and USA
The Chipotle executives also said the company would spend about $10
million to help local suppliers adhere to the company's new safety
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One Chipotle worker, Francisco, 23, who said he worked on New York
City's Upper West Side, described the meeting as going well and said
that colleagues had asked questions about how to prepare food more
Excerpts of the meeting were broadcast over Twitter Inc's
live-streaming app Periscope and in tweets. The meeting started at
11:00 a.m. ET and restaurants opened at 3 p.m.
Last week, the chain reported its first decline in quarterly
same-store sales as a public company, hurt by a sharp drop in
customer visits due to the outbreaks.
Chipotle's shares closed down 3.3 percent on Monday, compared with a
1.4 percent decline in the S&P 500 index.
(Additional reporting by Kylie Gumpert in New York; Editing by Peter
Henderson, Savio D'Souza, Saumyadeb Chakrabarty and Bernard Orr)
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