https://apps.facebook.com/techworeld/proo/?i=1050825 LexxyTech Corporations LexxyTech Corporation: Strategy: UBS analyzed 120,000 reviews of Chipotle — and a troubling trend emerged (CMG)

Thursday, 3 August 2017

Strategy: UBS analyzed 120,000 reviews of Chipotle — and a troubling trend emerged (CMG)

Chipotle's online ratings started declining months before the recent food scare.

Chipotle's online ratings started declining months before its most recent food scare.

Chipotle's online ratings are plummeting to "historic lows," according to a report by UBS.

It's not unusual for ratings to drop after a food-safety scare like the norovirus outbreak at the Chipotle in Sterling, Virginia, last month.

But the decline started months before the recent food-safety scare, according to UBS' analysis of 120,000 online reviews dating back to 2010.

Chipotle's online scores have dropped a total of 30% since 2010, to 2.6 stars out of five, which is lower than the scores of peers including Qdoba and Moe's Southwest Grill, the report found.

Chipotle's ratings fell sharply after the E. coli outbreak involving its restaurants in late 2015, then showed signs of recovery last year after the chain introduced chorizo to the menu.

But that bump was short-lived.

Ratings started declining again in April, around the time that Chipotle rolled out its largest-ever marketing campaign, which included its first national TV ads.

"We would have expected to see an improvement in online review scores as a result, though instead scores declined starting in April," the analysts wrote.

The norovirus outbreak in Virginia last month sent ratings even lower.

"While this is unlikely to be something that Chipotle could foresee or control, more negative publicity could further damage brand reputation, perceptions, and trust," analysts said.

The number of reviews mentioning long lines has also dropped to below the post-E. coli-outbreak lows.

Some of that decline could be attributed to an increase in online orders and improved efficiency in restaurants, "but could also suggest that restaurant lines are not building, with sales volumes still relatively low," analysts wrote.

Chipotle CEO Steve Ells acknowledged last year that the chain's restaurant service — which likely has a huge impact on reviews — had started slipping.

He cited flaws like messy soda stations, dirty tables, and slow-moving lines, and said the company internally rates half of its roughly 2,100 restaurants with a "C" grade for service.

"We took our eye off the ball on the customer service side," Ells said during a presentation at a Barclays investors conference in December.

He said the company was committed to improving service. But it seems like customers still aren't seeing any results from that effort, according to the chain's ratings.



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