Stats show Chipotle down, McDonald's up; Yorkers disagree
Recent sales figures suggest "fast casual" chain Chipotle is falling while fast food giant McDonald's is on the rise, but local residents' opinions indicate those trajectories may be short-lived.
Still reeling from a lengthy E. coli outbreak and investigation that began in October, along with a norovirus outbreak at Boston location in December, Chipotle reported its first quarterly decline on Tuesday since it went public a decade ago.
Despite opening 79 new restaurants in the fourth quarter of 2015, the chain's revenue was down almost 7 percent, while their net income was down 44 percent, according to their report. The Denver-based company's sales sank 36 percent at established locations in January, according to an Associated Press report.
Mandy Arnold, president of York-based Gavin Advertising, said Chipotle had built a very loyal customer base, but a major pillar of that success was trust.
"I think they can come back from this, but there's a perception that they were too slow to respond (to the health concerns)," Arnold said, predicting a lengthy road to recovery. "Their food is perceived as tasty and healthy, but they're going to have to deal with a feeling of betrayal from consumers."
Local residents expressed a willingness to forgive Chipotle more quickly on midday Tuesday in York Town Center near the restaurant's Springettsbury Township location.
Greg Arthur and Jessica Donnachie, both of York City, were heading into a nearby Italian restaurant, but both said they enjoyed Chipotle and would keep going in the future.
"(I like) the way it tastes, and it fills you up," Arthur said. "Every place has problems. As long as they respond, it's fine with me."
Sandra Pedraza, heading into work at a nearby hair salon, hadn't frequented the restaurant many times before because they weren't located in her hometown in New Jersey. But she said she liked it when she went.
"I feel bad about what happened; they're getting a bad rep ... and I feel like it's more political than about their product," Pedraza said. "I want to trust it again and probably am going to have to because I don't have many other options for lunch around here."
Earlier this week, the Centers for Disease Control and Prevention declared the E. coli outbreak over.
"We are pleased to have this behind us and can place our full energies to implementing our enhanced food safety plan that will establish Chipotle as an industry leader in food safety," co-CEO Steve Ells said in a statement on its earnings report.
On Monday, Feb. 8, the company will keep all of its locations closed until 3 p.m. for an all-employees meeting to share its findings from the 2015 outbreaks, according to a Chipotle press release.
Despite the poor final quarter, Chipotle was still able to report a nearly 10 percent increase in revenue for 2015 and nearly 7 percent increase in net income, according to its report.
On the opposite end of the spectrum, McDonald's, which once owned a majority stake in Chipotle, struggled for much of 2015 before finishing the year strong.
Total consolidated revenue fell approximately 7 percent for the year, according to the company's report, but U.S. sales rose 5.7 percent during the final quarter, following the launch of its all-day breakfast menu in October.
Emmett Patterson, who owns nine McDonald's locations in York and Adams counties, said the all-day breakfast menu has proven a huge boost to his stores' sales.
"It did exactly what McDonald's (executives) said it would and more," he said. "We're giving the customers what they were asking for, and the customers are rewarding us."
Arnold wasn't surprised by the breakfast boost, which she said served as a "shot in the arm" needed to shift the perceptions of the company's stockholders.
"Rolling out breakfast quickly was very important to show stockholders that they can be nimble," she said.
Lancaster resident Justine May said she has a friend addicted to McGriddles, so the all-day breakfast was big for them, but she would continue trying to stay away.
"I know it's not good for me," May said. "They need more healthy options."
Pedraza echoed May's sentiment, saying she used to eat it all the time, but never lately.
"I used to always get the deluxe breakfast combo because I worked close to a McDonald's, but it would just make me feel sick all day," Pedraza said.
Arnold said she's still concerned about McDonald's long-term growth. McDonald's closed more U.S. restaurants than it opened in 2015 for the first time since at least 1970, according to an AP report.
Steve Easterbrook, who took over as the company's CEO last March, cautioned that the company wanted to see another quarter or two of positive results before shifting gears from turnaround mode to a focus on growth.
He said McDonald's would keep momentum going by focusing on areas like improving order accuracy and a recently launched mobile app.
— The Associated Press contributed to this report.
—Reach David Weissman at firstname.lastname@example.org.