It’s no secret that Chipotle has had a rough year. This past January, the once all-powerful burrito giant was blindsided by a wide-spread E. coli outbreak, which initially sickened 60 customers at locations across 14 states. As a result, the company’s sales have plummeted, and financial analysts have predicted that it could take years for Chipotle to return to its former market dominance.
In the midst of this financial free-fall, Chipotle has attempted to win back customers’ loyalty the only way it knows how—by attempting to buy it back with lots and lots of free food. Back in March, Bloomberg hypothesized that the company could end up losing close to $66 million in sales due to its complementary burritos program, and today that number is estimated at closer to $70 million.
Now, confirming what analysts have long believed to be true, Chipotle is finally admitting that free food might not have been the way to go.
"Promotional offers of free food do not directly impact revenue," the letter reads. "Furthermore, given the unusual sales trends resulting from the food borne-illness incidents, we were unable to calculate or accurately estimate any indirect impact that promotional activity had on revenue."
As Business Insider notes, Chipotle executives have declared their free food promotions a successes in the past.
"Free burritos—turns out it works," Jack Hartung, Chipotle’s CFO, claimed confidently back in March. The restaurant chain had just finished doling out 2.5 million mobile offers. "It brings people into the restaurants."
As it turns out, that’s not really the case. According to Bloomberg, Chipotle's sales were still down 24 percent in June compared to the same time last year.