Lettuce-linked parasite outbreak in the US hits Taco Bell where it hurts the most

A parasite outbreak linked by US health authorities to lettuce supplied to Taco Bell has triggered a sharp drop in customer visits, hurting the restaurant chain's performance and weighing on parent Yum! Brands Inc. while also spilling over to other fast-food and salad chains.

Customer visits to Taco Bell restaurants on July 17 were 18.9% below the chain's average Friday foot traffic recorded between January 1 and July 6, according to location analytics firm Placer.ai, which uses mobile device data to track consumer visits. The decline was significantly steeper than the 1.9% fall recorded by the broader fast-food category on the same day.

Placer.ai's data also showed traffic at Chipotle Mexican Grill Inc. and Cava dropped 6.9% and 4.2%, respectively, on July 17 compared with their average traffic for the same weekday during the January 1 to July 6 period.


The data suggests the outbreak has become a setback for Taco Bell, which has been Yum! Brands' biggest growth driver in recent years. Foot traffic at Taco Bell was also weaker during the four days leading up to July 17, with the chain underperforming the broader fast-food segment on each of those days, according to Placer.ai.

Yum shares decline as parasite outbreak widens

Investor sentiment has also weakened. Yum! Brands shares have fallen nearly 10% between July 10 and the close of trading on Monday in New York. The stock slipped another 0.4% on Monday, marking its sixth consecutive daily decline.

Meanwhile, Michigan health authorities on Monday reported 6,148 cases associated with the cyclosporiasis outbreak, an increase of 1,146 cases since the previous update issued on Friday.

According to the latest figures from the Michigan Department of Health and Human Services, the outbreak has resulted in 102 hospitalisations. No deaths have been reported.

Cyclosporiasis is an intestinal infection caused by consuming food, most commonly raw fruits and vegetables, or water contaminated with faeces, according to the US Centers for Disease Control and Prevention.

Investigation focuses on Taco Bell lettuce supplier

The CDC linked the outbreak to shredded iceberg lettuce served at Taco Bell restaurants across Indiana, Kentucky, Michigan, Ohio and West Virginia. The US Food and Drug Administration said on Thursday that its traceback investigation pointed to a single supplier of iceberg lettuce from Mexico that supplied Yum! Brands-owned Taco Bell outlets where infected customers had eaten before falling ill.

The investigation took another turn over the weekend. On Saturday, the FDA said a sample of shredded iceberg lettuce supplied by Taylor Farms had tested positive for cyclospora. However, the agency said on Sunday that laboratory specialists had re-examined the findings and concluded the result was a false positive, leaving no confirmed product sample testing positive for the parasite.

Taco Bell has nevertheless voluntarily removed all lettuce in the US supplied by Taylor Farms, one of the country's largest produce companies. Health officials have traced cases of the gastrointestinal disease, caused by ingesting a microscopic parasite, to lettuce served at Taco Bell outlets.

In a letter posted on LinkedIn on Monday afternoon, Taco Bell Chief Executive Officer Sean Tresvant said the company would continue to be transparent "about what we know and what we are doing next."

"We aren’t entitled to your loyalty," Tresvant wrote, adding that the chain was "asking the hard questions and doing the work to help build a stronger food system."

The impact has extended beyond Taco Bell. According to Placer.ai, Chopt, an East Coast-focused fast-casual salad chain, recorded double-digit declines in customer traffic on July 16 and July 17 compared with similar days earlier this year. Chipotle and Panera Bread also saw traffic decline during the same period and underperformed the broader fast-casual restaurant category.

Chipotle said it is closely monitoring developments and does not believe any of its ingredients are linked to the outbreak. Panera declined to comment, while Chopt did not respond to a request for comment.

Sweetgreen Inc. also underperformed the wider fast-casual segment, although the decline was less pronounced. The company has said it has no connection to the outbreak and does not use iceberg lettuce. Even so, its shares have been volatile, falling more than 20% between July 10 and Monday's market close.