Conditions at Chipotle Mexican Grill are getting worse with the release of the new update leading to closure of the Chipotle restaurant near Boston after illness case of 80 students. On Tuesday, the number of illness cases at Chipotle have increased to 80, the worst part is at the time when the restaurant chain is already struggling with an E. coli outbreak. People in nine different states have been infected with the E. coli outbreak that hit the Chipotle restaurant chain.
With the closure of the Chipotle restaurant in the Pacific Northwest, the shares of the company fell sharply $9.63 to close at $542.12, causing extensive cleaning of other stores in California, Minnesota, New York and Ohio that were linked to the E. coli outbreak. As per the statement from the Boston College, all the infected students have been tested for E. coli and norovirus at the direction of the Massachusetts public health authorities. According to the US Centers for Disease control and Prevention (CDC), norovirus is the most common cause of gastrointestinal illness in the country. Every year about 21 million people are being infected with the virus causing deaths of about 800 people a year.
As per statement by the company, they have no evidence in favor of the fact that the recent incident is linked with the previous E. coli incident. There are no confirmed cases of E. coli connected to Chipotle in Massachusetts. At a Sanford C. Bernstein & Company investment conference in New York on Tuesday, Chipotle said it might be forced to raise prices next year in order to cover up the costs of an enhanced food safety program and business lost because of the closed stores and slumping sales. Last week, it filed a statement with the Securities and Exchange Commission saying that the E. coli problem would push down sales in stores that had been open at least a year by as much as 11% in the fourth quarter.
In a statement provided to CNBC, The bad news for those who wish to assess the value of Chipotle is that each of those numbers is a complete mystery.
When Chipotle updated shareholders about the impact of its E. coli incident on Dec. 4, it predicted that same-store sales would drop 8 to 11 percent in the fourth quarter, and rescinded comparable restaurant sales guidance for 2016 (after predicting a single-digit increase in October). Chipotle also announced that it expected to see $6 million to $8 million in the fourth quarter to deal with food safety issues, but made clear that this "does not include any estimate for legal claims and related expenses."
In other news WeUpIt reported, the school said it was working with local health officials to determine the cause of the illness. The customers reported eating at Chipotle outlets between November 18 to November 26 and which corresponds to about a week before they became ill. It is imperative to state that post the outbreak the company had assured customers that it would tighten its food safety standards.
The Centers for Disease Control and Prevention (CDC) said it is investigating more recent cases of E. coli cases linked to Chipotle, and that it does not know yet if they are linked to a larger outbreak that began at the end of October.
When looking at the daily charts for Chipotle Mexican Grill, the stock has been in a strong downtrend over the last couple of weeks. The Centers for Disease Control said Monday that it was looking into an outbreak of a different DNA fingerprint of Shiga toxin-producing E. coli that had sickened five people in North Dakota, Kansas and Oklahoma between November 18 and November 26th, NorthstarNational reported.
"Chipotle's food safety issues seem to have exposed deficiencies in the chain's supply testing protocol, particularly as it - like Yum China - manages hundreds of small suppliers", David Palmer of RBC Capital Markets said in a December 7 report.