Restaurant chains and grocery stores experienced significant traffic and sales declines in July following the Food and Drug Administration's announcement of an ongoing cyclospora outbreak. Chopt Creative Salad Co. locations saw traffic fall 24% on July 18, right after the FDA announcement, while Sweetgreen reported consumer concerns had about a 6 percentage point impact on same-store sales in July. The FDA pointed to iceberg lettuce processed in Taylor Farms' central Mexico facility as the likely culprit for the outbreak that has sickened at least 10,000 people, prompting widespread consumer avoidance of salads and lettuce products.
Restaurant Chains Report Traffic and Sales Declines
Chopt Creative Salad Co. locations experienced a 24% traffic decline on July 18, according to Placer.ai data. Sweetgreen reported on Thursday that consumer concerns about the outbreak had about a 6 percentage point impact on same-store sales in July, and the company cut its full-year outlook. Salad and Go filed for Chapter 11 bankruptcy earlier this week and closed all of its locations, stating the cyclospora outbreak had exacerbated its existing business challenges.
Yum Brands' Taco Bell is the only national restaurant chain that has been linked to the multistate outbreak. The chain uses iceberg lettuce frequently across its menu. Taco Bell's sales and traffic to its restaurants initially tumbled after the FDA announcement, but Yum executives said in late July that business was already recovering.
Chipotle Mexican Grill also saw its sales dip. "In the second half of July, we did see a softening, call it about 200 basis points or so, right around the issue that's affecting the industry around cyclospora," Chipotle CFO Adam Rymer said on the company's earnings call in late July. The burrito chain offers romaine lettuce as a topping and uses fresh cilantro across much of its menu.
Grocery Store Prepackaged Salad Sales Drop 14%
Grocery stores experienced significant sales declines during the outbreak. Dollar sales of prepackaged salads plunged 14% during the four weeks ended July 25 compared with the year-ago period, according to NielsenIQ data.
FDA Links Outbreak to Taylor Farms Mexico Facility
The FDA pointed to iceberg lettuce processed in Taylor Farms' central Mexico facility as the likely culprit for the outbreak that has sickened at least 10,000 people. Taylor Farms has voluntarily recalled products supplied from that facility.
The FDA is also tracking at least six other active outbreaks without a clear culprit; those outbreaks have significantly smaller number of reported cases. The long incubation period for cyclosporiasis makes it difficult to identify the contaminated ingredients.
Cyclospora is a water-borne parasite. It typically spreads through contaminated produce, like lettuce, green onions, raspberries and fresh herbs. The FDA is advising consumers to take extra steps, like discarding outer layers of fruits and vegetables, to reduce risk of exposure.
Restaurant Chains Implement Customer Reassurance Strategies
Sweetgreen and other restaurant chains implemented strategies to reassure their customers. On the chain's 19th birthday, CEO Jonathan Neman posted on X that its restaurants have never served iceberg lettuce and only source lettuce grown in the U.S.
Just Salad founder and CEO Nick Kenner posted on LinkedIn detailing the chain's food safety measures, like peeling and discarding the outer leaves of romaine and kale and double washing the leaves.
Chopt posted on its Instagram about food safety. "Food safety has always been at the heart of how we operate. ... We promise to continue monitoring guidance from public health officials and remain committed to earning your trust every time you choose Chopt," the company wrote.
Michigan Health Department Lifts Lettuce Avoidance Guidance
The Michigan Health Department on Thursday said residents can eat lettuce and salad greens again as new infections slowed. "The broad, precautionary recommendation to avoid bagged salad mixes during the Cyclospora outbreak is no longer in effect," the agency said in a statement. "Residents may resume their usual food handling practices and make choices based on their individual risk tolerance."
The state appears to be hardest hit by the outbreak, with two deaths and more than 12,400 cases reported in Michigan alone.
FAQ
What caused the cyclospora outbreak affecting restaurant chains?
The FDA pointed to iceberg lettuce processed in Taylor Farms' central Mexico facility as the likely culprit for the outbreak that has sickened at least 10,000 people. Taylor Farms has voluntarily recalled products supplied from that facility.
How did the cyclospora outbreak impact restaurant sales in July?
Chopt Creative Salad Co. locations saw traffic fall 24% on July 18, right after the FDA announcement. Sweetgreen reported consumer concerns had about a 6 percentage point impact on same-store sales in July. Chipotle saw a softening of about 200 basis points in the second half of July. Prepackaged salad sales at grocery stores plunged 14% during the four weeks ended July 25.
