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Chipotle reports first project delays, suspends groundbreaking on new sites

Chipotle

Chipotle said today that it has begun to see the first construction delays on restaurant projects already in motion – and separately revealed it has agreed to pay a $25m fine to settle a long-running food safety investigation with the federal government.  

Despite the coronavirus taking hold in the US during the past month, the fast food chain managed to open 19 new sites in the three months to the end of March and currently has 49 under construction.

However, it has now started to see hold-ups on some of those schemes and has also pre-emptively delayed groundbreaking on the majority of projects in April.

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Chipotle reported that about 100 restaurants are temporarily closed as a result of the pandemic, mainly inside malls and shopping centers, as well as 17 locations in Europe.

Brian Niccol, chairman and CEO of the company, said he was grateful to all employees for their commitment and efforts in providing guests access to its food during this unprecedented time.

“Investing in digital over the last several years has allowed us to quickly pivot our business with Q1 digital sales reaching our highest ever quarterly level of $372m.

“Our strong brand, business model and balance sheet give us the confidence to not only weather this downturn but continue to judiciously invest in key areas so that when we come out the other side, we will emerge even stronger.”

Chipotle’s restaurants are currently stocked with gloves, hand sanitizers, masks, and a tamper-evident packaging seal for contactless mobile pickup and delivery orders.

Meanwhile, the chain confirmed it has signed a Deferred Prosecution Agreement with the US Attorneys Office for the Central District of California to resolve an investigation into past food safety incidents beginning in 2015.

The government will not take any action relating to these past incidents for three years provided that Chipotle complies with its obligations under the agreement, which include paying a $25m fine.

It must also enhance and maintain its existing comprehensive compliance program, which is designed to ensure that it complies with all applicable federal and state food safety laws.

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Andrew Seymour

The author Andrew Seymour

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