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Chipotle Giveaways After Outbreak

Since July 2015, Chipotle has been suffering from significant reductions in sales due to negative publicity from food poisoning outbreaks. Many of Chipotle’s customers have been infected by food borne illnesses such as salmonella and E. coli. The reduction in sales caused by the infections is expected to be a 19% decline in the second quarter of this year and a 14% decline in the third quarter of this year. Prior to offering giveaways to customers, Chipotle made a huge effort to clean its stores and implement better tactics to fight against the spread of food borne illnesses by closing many of its stores across the US. Chipotle was able to stop the further spread of food borne illnesses after several months of closure, but Chipotle’s sales have significantly declined due to the negative perception of Chipotle from consumers. To regain the trust of their customers, Chipotle has been giving away free menu items such as burritos, chips, and guacamole. The free food may be helping Chipotle regain some trust from consumers, but they are also costing Chipotle a significant amount of money in addition to the significant sales reduction due to the outbreak. Chipotle is expected to spend about $70 million on free burritos between February and May 15.

http://www.wtae.com/news/chipotle-ceo-deeply-sorry-about-customers-who-fell-sick/36912380

This story connects to global corporate citizenship because Chipotle has a responsibility to its stakeholders to appeal to their interests. Since Chipotle’s food ingredients became infected due to unknown reasons, Chipotle must appeal to the interests of its customers by spending the necessary time and money to clean their restaurants in order to prevent more customers from getting infected. The stakeholder group that has the most salience in this situation are Chipotle’s customers because without them, Chipotle would not make a profit to continue running. By giving away free food, Chipotle is attempting to mend its relationship with customers, however, this method of customer relationship mending may be costing Chipotle a significant amount of money.

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