From a customer sentiment perspective, Chipotle is in worse condition today than it was during 2015’s food-safety crisis, according to data mined by UBS analyst Dennis Geiger.

Geiger, backed by the UBS Evidence Lab, broke down customer review scores over the past several years. His findings, along with a downgrade to sell from neutral and a target-price cut to $290 from $345, sent Chipotle’s shares tumbling nearly 5 percent to $308.82 in Thursday (February 1) trading.

“Despite aggressive efforts to improve brand perceptions through a new national advertising campaign and the launch of new products including queso recently, customer review scores have not shown any signs of improvement,” Geiger noted, as reported by CNBC.

The data showed that Chipotle’s online review ratings were hovering around 3.80 in March 2010.

READ MORE: Chipotle’s mistake: Failing to build a food safety culture.

The brand’s food-safety issues really hit public conscious in November 2015 when the chain voluntarily closed 43 of its Washington and Oregon locations as health officials investigated an outbreak of E. coli food poisoning. What followed was a 14-state crisis that led to a yearlong sales downturn and erased around half of Chipotle’s market cap.

Geiger’s findings from more than 230,000 Chipotle reviews showed a steady decline from that 3.80 mark through November 2017. There was a brief rebound in March 2016 but the line has gone down ever since.

Geiger said that 37 percent of the more than 1,600 customers polled online by UBS said they frequent Chipotle less often than they used due to food-safety concerns.

“Chipotle’s brand perceptions remain challenged and headline risk from potential future incidents remains elevated. As a result, it remains unclear how long it will take for Chipotle brand perception to reach previous levels,” CNBC reported Geiger as writing.

There are reasons to believe Chipotle’s issues are more perception than fact driven. Not that the source really changes the bottom line. But there is simply no chain in America that elicits such stock market reaction—and overreaction—from less news.

For example, on January 30, shares dropped about 5 percent as anecdotal reports surfaced on user-generated website There were nine individual reports the day before on the site, all from different locations. For some perspective, Panera Bread, a similarly sized fast casual, had six reports on January 29.

And how much of this stems from the, “Well, I did eat at Chipotle, and don’t they have food-safety problems” line of thinking? Supergirl” actor Jeremy Jordan blamed Chipotle in November for an illness on Instagram and the news dropped the chain’s stock as much as 5.9 percent to $263, the lowest mark in almost five years. A report at a Los Angeles store in December plummeted shares nearly 8 percent by noon that day. In both cases, Chipotle said it was looking into the reports but hadn’t found links.

And then there was the Sterling, Virginia, incident in July. More than 130 customers fell ill from norovirus-like symptoms. Chipotle said the issue likely stemmed from an employee coming to work sick and not following proper protocol.

When you consider that Chipotle has more than 2,350 restaurants, the reality doesn’t quite line up with the reaction. But that’s the price Chipotle has paid for several years, and Geiger’s info doesn’t show any let-up on the horizon.

Here were the reasons for why people are eating at Chipotle less often than they used to:

  • Concerns about food safety: 37 percent
  • Like other quick-service restaurant better: 22 percent
  • Too expensive: 22 percent
  • Food not as good as before: 18 percent
  • Family don’t want to go: 15 percent
  • Less spending money: 14 percent
  • Restaurants not as clean as before: 12 percent
  • Eating at quick-service restaurants less often: 10 percent
  • Friends do not want to go: 9 percent
  • Food and drinks not healthy: 8 percent
  • Service not as fast as before: 7 percent
  • No new menu items: 6 percent
  • Fewer promotions: 5 percent
  • Don’t like atmosphere: 4 percent
  • Any other reason: 16 percent

There are some interesting numbers here. No. 1, as noted earlier, is kind of an obvious crutch. The expensive note, however, is something worth tracking. Chipotle hiked its prices nationwide in mid-January, completing a process that began earlier in the year when select markets in April and November saw upticks of 5–7 percent. Chipotle rolled the increase out systemwide early in 2018.

Chipotle had to change its price structure to balance rising food costs. Could this offer a small window into what the customer reaction might be?

In general, quick service has been a value war lately, with many brands building offers around the $5 price point and others, like McDonald’s and Taco Bell, competing for $1 bargain hunters. Taco Bell’s Nacho Fries just released at that starting point and McDonald’s said in its January 30 conference call that the $1 $2 $3 Dollar Menu has already fired up sales. Sonic CEO Cliff Hudson, after the chain’s first-quarter review, said: “There is that tension at all times of what is the price point in order to try to drive traffic in this value-sensitive time where competitors are very, very stuck on that—large competitors in particular.” Sonic has a Double Feature bundle meal for $3.99 and recently announced a Soft Pretzel Twist for $1.99.

Chipotle’s menu hasn’t moved much, either in offerings or price points, since it became a household name. Before the recent hike, prices had not changed since mid-2014, before the food-safety crisis. The company said in the third quarter that increasing prices eased some of the commodity burden. In the third quarter, food costs were 35 percent of revenue, which was actually a decrease of 10 basis points compared to the prior-year period. For the nine months trailing September 30, food costs were 34.4 percent of revenue, a decrease of 50 basis points, year-over-year.

Menu wise, Chipotle garnered a lot of attention—in both directions—for its queso release in September. The brand revamped the recipe in December after negative feedback. Chipotle also cut chorizo from its menu in September.

These moves, or lack of, don’t seem to bother most consumers, evidenced by the paltry 6 percent who took issue with the lack of new offerings.

Perhaps a more relevant question is whether customers believe Chipotle is still worth the price tag compared to its competitors. The brand’s ability to leverage local and fresh ingredients has taken a backseat to food-safety reports in recent terms.

“Food safety issues likely gave customers a reason to try a new brand or return to more mature brands. The increasing penetration of fast casual brands and traditional quick service restaurants has likely weighed on Chipotle’s efforts to regain lost customers,” Geiger said in the note.

Chipotle reports its fourth-quarter earnings after the bell on February 6. In addition to tracking its recent performance, investors will likely be looking for an update on the chain’s CEO search. Founder Steve Ells announced he was stepping down in November and the board’s search committee would start searching for a new leader “with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.” Along with directors Robin Hickenlooper and Ali Namva, Ells, who is now executive chairman, said he would be part of the search.

Whatever the news might be, expect Wall Street to react swiftly, and harshly—if the news calls for it. In October, the brand’s third-quarter earnings, which showed 1 percent same-store sales growth versus the prior-year period, sent shares nosediving. Extending a year in which they were already down about 14 percent, they plummeted an additional 14.5 percent the day following the report. The nearly 50–point tumble beneath $300 marked the first time since March 2013 Chipotle shares were valued so low.

Again, that kind of magma-hot reaction is reserved for few in foodservice, if any. But that’s simply life as Chipotle knows it these days.

Fast Casual, Finance, Story, Chipotle