Food-Fighting CEO Raises Specter of Past Failures

One shouldn’t throw stones in glass houses … or contaminated burritos in struggling restaurants.

Yes, it’s been a dramatic week in the fast-food sector after two of its biggest figureheads went head-to-head over the quality of their products.

No matter who came out on top, the exchange indicated there’s probably a good reason why it’s rare for CEOs to bad mouth their competitors’ merchandise.

It all started last week, when Chipotle Mexican Grill’s Steve Ells told Business Insider that companies including McDonald’s and Panera Bread were misleading customers by claiming their food was “clean”.

“THE PROBLEM WITH GOING NEGATIVE IS IT CAN MAKE A CEO LOOK NASTY, PERHAPS EVEN BRINGING THEIR BUSINESS ETHICS INTO QUESTION.”

Panera CEO Ron Shaich shot back by reminding the publication’s readers that Chipotle had experienced its own fair share of hygiene issues and “shouldn’t be throwing bombs”.

Chipotle has yet to fully recover from an E. coli outbreak in 2015 that sickened 55 people across 11 different states. It has since tried to clean up its image by stripping all preservatives and flavors from its menu.

Ells said competitors were misleading customers because they used so-called natural flavors, which are extracted from natural ingredients but still produced in a lab. “They don’t have a clean chicken nugget,” Ells said. “Because they still have industrial ingredients.”

The last thing Chipotle needs right now, though, is any reminder of E. coli scandal. Last month, the company booked a 76% fall in first-quarter profit as it still struggles to bring customers back to its stores.

There may be some method to Ells’ approach, though: his criticism also has brought attention to Chipotle’s turnaround efforts. And there are a few other CEOs out there who regularly pan competitors, seemingly with little fallout: T-Mobile’s John Legere comes to mind here.

But the problem with going negative is that it can make a CEO look nasty, perhaps even bringing their business ethics into question.

Some customers might also be offended by having their current choice of product ridiculed or undermined.

And let he who is without sin …

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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