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Can Chipotle Bounce Back?

Why Customers Continue to Say "Yes" to the Troubled Chain


Reliable, consistent, and safe are not words typically associated with Chipotle Mexican Grill. However, that is exactly how some loyal Chipotle customers describe the franchise.

After a series of E.coli outbreaks and food safety concerns, the casual dining stock remains significantly lower than its 2015 peak. Several firms like Wedbush are strongly bearish on the stock. But Piper Jaffray is optimistic in seeing signs of brand recovery.

Wedbush has a price target of $370 on the stock; Piper Jaffray is on the end of the spectrum looking for $483 a share. Wall Street's average price target is $398.93. Eleven firms have Chipotle as a "buy", eight a "sell" and eighteen a "hold." 34.97% from December 17, 2015


While the bulls and bears dig in, the question that will solve the argument remains: who is right? Will people come back to Chipotle?

Customers at the West 48th Street location in New York City were happy to discuss why they came back. The restaurant had a dozen customers for the Thursday night dinner rush. Despite the small crowd, the customers overwhelmingly praised Chipotle.

Brian Hill and Marguerite Iskenderian eat at Chipotle at least once a week because it is close to their nearby community theater rehearsal space. Iskenderian said "I didn't realize that Chipotle had closed down"last spring to work on their health practices. When asked why she comes back to Chipotle, she cited "reasonable prices, you know you're going to find a seat, the service is good and fast, and the food is consistently good."

Customers Ian Hurdle and Justin Gilman recognized the food safety issues that plagued Chipotle in the last year but vowed to keep coming back. The friends travel together often and Ian said that eating at Chipotle "removes the mystery. You know what you're going to pay, you know how much food you're going to get, you know what you're getting in to." He added "there's less risk when you're on the road. We want to try the mom and pop places but we know what we're going to get with Chipotle."

Chipotle workers fill orders for customers at a restaurant in Miami.
Getty Images
Chipotle workers fill orders for customers at a restaurant in Miami.

When asked if he was concerned about the food safety issues, Hurdle shrugged it off. "I don't think I was necessarily surprised, Chipotle definitely popped off really quickly in the last five or six years so I don't know if they got too comfortable or if something slipped somewhere. But I kept an eye on the situation and the company seemed to be pretty transparent and vocal about the changes they made." Although they're comfortable with the chain, many of their friends and family don't feel their positive outlook. "My wife is just not going to come here again. She wrote it off", said Gilman.

The customers obviously have a certain level of trust for Chipotle given that they continue to eat there. Though they admitted that Chipotle lost some customers permanently, Ian Hurdle remained optimistic for the brand. "I think our generation has an attachment with it. I think it's not too hard to win us back."