Chipotle Mexican Grill founder Steve Ells has agreed to step down as CEO following two difficult years for the chain. Ells will become executive chairman, and the company has announced its search for a replacement CEO.
“The search committee will be looking for a leader with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales,” reports Specialty Food.
Shares of the chain surged after the announcement Wednesday. The chain had been struggling since a series of foodborne illness outbreaks beginning in 2015 including reported cases of E. coli, norovirus, and salmonella. These reports of contamination were not helped by video shared by customers in July showing a rodent infestation in one Chipotle Mexican Grill location.
While Chipotle has undertaken several measures to improve public opinion over the past two years, such as the launch of its “Beverages with Integrity” program last year and its transition away from all artificial ingredients this past March, none of these efforts has managed to bring the chain out of its slump.
“Bringing in a new CEO is the right thing to do for all our stakeholders,” Ells said in a statement. “It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food.”
Ells is a trained chef, but he has been criticized by the media for not having the operational experience or savvy to run such a rapidly expanding chain, which now counts more than 2,350 restaurants. Bloomberg reports that while Ells previously worked at Chipotle with a co-CEO, Monty Moran, he has been running the company alone since the end of last year; Bloomberg suggests that this may have contributed to some of the chain's operational problems.
“It’s been mismanaged for two years,” says Michael Halen, an analyst at Bloomberg Intelligence. “They need someone who can turn around horrible sales and operations."
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