How Chipotle’s Food Scares May Be Affecting Foot Traffic and Sales

Foursquare predicts sizable declines

Foursquare's data points are becoming a bigger part of its business, and this week it flexed a little muscle in that regard.

Based on its Place Insights analytics tools, the mobile-app company looked at how Chipotle's E.coli and norovirus outbreaks have affected its foot traffic and store sales—a week and a half before the brand's earnings call, no less. The burrito chain has been plagued by health safety issues for about the past six months. 

From Q4 2015 to the present, Foursquare measured foot traffic at some 1,900 Chipotle locations in the United States and compared them to a year earlier.

Here's what the New York-based tech player found:

  • Chipotle same-store foot traffic was down 23 percent.
  • Foursquare estimates that same-store sales will decline 30 percent for Q1 compared to the same period in 2015.
  • Loyal customers were 50 percent more likely to stop going to Chipotle after the E.coli scare.
  • Formerly loyal patrons were slightly more likely than the average diner to instead go to Whole Foods to eat, interestingly, while also frequenting typically popular chains like McDonald's and Starbucks. 

Foursquare CEO Jeff Glueck gave a reasonable explanation for the data in a blog post: "When Chipotle came on the scene, the chain earned lots of fans for its approach to 'food with integrity,' including antibiotic-free meats, GMO-free ingredients, and fresh local produce. However, the last six months have been a tumultuous ride."