clock menu more-arrow no yes mobile

Filed under:

Consumers Are Deeply Unsatisfied With Chipotle

Customer satisfaction in the burrito chain continues to plummet

Joe Raedle/Getty Images

Add more negative consumer reviews to the list of problems plaguing Chipotle. A report released Tuesday by the American Consumer Satisfaction Index saw the fast-casual burrito chain taking a big hit, falling six percent in consumer satisfaction.

Americans currently spend more money at restaurants than they do at traditional grocery stores — a trend that fast-casual eateries like Chipotle helped pioneer. And because they tend to be cheap, fast, and semi-healthy, fast-casual chains generally see higher customer satisfaction scores than full-service restaurants. But Chipotle, which debuted "near the top of the industry" in last year's ASCI report, is a notable exception.

Chipotle scored 78 on ACSI's survey — a six percent lower score than its position at the top of the list last year. Six percent might not sound like much, but in the world of brand loyalty, it often translates to a drop in sales. "For most industries, there is a strong relationship between consumer satisfaction and sales," says Dr. Forrest Morgeson, director of research for ACSI. "More satisfying companies have more loyal customers. And loyal customers lead to a healthier financial performance."

Though consumer satisfaction scores usually differ year-over-year, Morgeson says Chipotle's drop was much larger than is typical. "That's a big year-on-year fall. That's substantial. We consider a three percent drop to be significant."

In a press release, ACSI Managing Director David VanAmburg compared the struggling chain to Netflix, whose stock took a dive in 2011 after it announced it would separate its DVD-by-mail and streaming businesses. "Netflix rebounded rather quickly, but it can take more time for a restaurant to recover from quality issues," he said.

That's because quality is paramount when it comes to consumer satisfaction. Diners are more concerned than ever with where there food comes from and how it is prepared. The ACSI survey asks diners to grade each brand on several metrics: variety of beverages, variety of menu items, customer service, etc.

Chipotle's fall from grace was tied largely to one thing: reliability. "With Chipotle, we saw a drop in consumer perceptions of the reliability of the restaurant, which is to be expected when you look at something as significant as food-borne illness," says Morgeson.

But as the report notes, "quality issues can be challenging, particularly for food service companies, which could elongate Chipotle's recovery time." That sentiment is echoed by many financial analysts, who think Chipotle's recovery could take much longer than initially expected.

Reasons Mcdonald's is on the Brink of Failure