Shaken consumer confidence reflected in dampened sales and a massive drop in stock value
At this point it’s hard to describe Chipotle’s situation as anything other than one of the nastiest reputation nosedives in recent memory. What started out as a couple of “isolated” customer illness incidents (E. coli and norovirus) has become an organization-wide issue, scaring hungry customers away and leading to a precipitous fall in stock price. While tactics including promises of food safety and even a full-page newspaper ad slowed the damage when they were deployed, the continued presence of the core issue – a lack of (or lack of adherence to) proper procedures to prevent foodborne and communicable diseases – left Chipotle looking incompetent. Further compounding the issue is Wednesday’s announcement that a grand jury has subpoenaed the company in relation to one of the norovirus outbreaks that kicked off the chain of unfortunate events back in August of 2015.
Chipotle can recover, but it’s going to take time, effort, and for someone there to figure out how the heck so many fell ill, not to mention demonstrating to all of us that whatever the flaw is, it’s been fixed for good. Words buy you time, but failing to back them up with effective action will leave any brand hurting.
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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is vice president for the firm, and also editor of its newsletter, Crisis Manager]
– See more at: http://managementhelp.org/blogs/crisis-management/2015/12/30/infographic-anatomy-of-a-corporate-apology/#sthash.NDHqceLT.dpuf
Jonathan L. Bernstein, president of Bernstein Crisis Management, Inc. has more than 25 years of experience in all aspects of crisis management – crisis response, vulnerability assessment, planning, training and simulations.
Erik Bernstein is vice president of Bernstein Crisis Management. Erik started with BCM in 2009 as a writer and subsequently became social media manager for the consultancy itself as well as for a number of BCM clients before moving to the VP position.