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Burrito Burnout? Deutsche Bank Foresees Drop in Chipotle Shares

Deutsche Bank advised investors on Tuesday to sell their stock in Chipotle, fearing the burrito chain that built its reputation on high-quality, freshly prepared ingredients will suffer a "permanent loss of customers" after a series of foodborne illness outbreaks that affected more than 500 people across 14 states.

Chipotle retrained all its employees earlier this month after receiving certification from the Centers for Disease Control that the outbreaks were over. The company also reconfigured each store's food preparation setup and moved some tasks such as vegetable washing and cheese shredding to a central kitchen instead of handling them at individual restaurants.

Image: US-RESTAURANTS-HEALTH-FOOD-SAFETY-CHIPOTLE
JASON REDMOND / AFP - Getty Images, file

But this may not be enough to convince Chipotle's once-loyal customer base — or its investors — to return, said Deutsche Bank, noting in its report that, "While there has not been evidence of any new incidences, the question still exists on whether or not Chipotle could weather another outbreak, especially as management now claims its supply chain and processes are the 'safest' in the industry."

Despite all these changes, customers who do remain loyal to the burrito chain will find one thing that hasn't been touched: the menu, which has remained exactly the same for the past 23 years, other than the addition of tofu in 2014. Though the chain prides itself on its "focused" menu, Deutsche Bank cited menu fatigue as another reason in its decision to downgrade the company's stock.

However, Chipotle fans insisted on social media that the menu is one of the main reasons they return to the restaurant.

"We come back three times a week because it's the best thing ever and we don't want a thing to change," wrote one. Another admitted proudly, "I've ordered the same thing every time since 8th grade." Others suggested there were additional methods of ensuring repeat visits. "How about a loyalty program... Nothing says I'll probably come back like 4 of 10 stamps."