Chipotle brand view slips among consumers: poll

September 7, 2016 9:27 PM EDT

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By Tom Polansek

CHICAGO (Reuters) - Consumer opinions of Chipotle Mexican Grill have slid in recent weeks on food safety concerns, pollster YouGov BrandIndex said on Wednesday, a move that hurts the burrito chain's efforts to recover from a string of foodborne illnesses last year.

The YouGov data, requested by Reuters, shows that perceptions about Chipotle's quality on Tuesday returned to levels last seen in early August. Before the latest survey, brand perceptions had nosed into positive territory for the first time since last year.

The survey was carried out the same day investor William Ackman disclosed after the market close that his hedge fund had purchased a 9.9 percent stake in Chipotle, buying in after the once high-flying company was battered by food-safety issues.

"For at least some consumers, the outbreaks from last year still resonate and for those consumers, eating in a Chipotle even today is not worth the risk," said Ted Marzilli, YouGov BrandIndex's chief executive officer.

Chipotle has given away millions of free burritos and other menu items, including guacamole and chips, to revive sales growth after outbreaks of E. coli, salmonella and norovirus linked to its outlets last year put off customers.

In July, the company reported an uptick in comparable sales for the month but said it had a bigger-than-expected drop in such sales in the quarter ended June 30.

Ackman's fund said in a regulatory filing that Chipotle was undervalued.

Chipotle's own research on consumer perceptions shows "the overall trend is moving in the right direction," a spokesman said. "Week-to-week fluctuations will always occur, but we tend to focus on longer-term trends," he said.

YouGov said it interviews 4,800 people each weekday in the United States for its polls, with participants drawn from an online panel of more than 1.8 million people.

On Tuesday, 4.5 percent more people said they had a negative rather than positive perception of Chipotle's brand, according to its data.

Consumer opinions dropped in the last quarter of 2015, with 31.2 percent more people saying in late December that they had a negative rather than positive perception of Chipotle's brand, according to YouGov.

Brand perceptions have since improved steadily but remain below last summer, prior to the food-safety problems.

Regarding quality, 4.8 percent more people said they felt positive rather than negative about Chipotle on Tuesday, according to YouGov. That was down from about 9 percent on Aug. 23 and from more than 20 percent a year earlier.

(Reporting by Tom Polansek; Editing by Andrew Hay)

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