TIME Nation
Can Taco Bell Win Back Its Customers? 

Friday, Dec. 08, 2006
By Tracy Samantha Schmidt

Still grappling with an E. coli outbreak, the fast-food chain is doing too little to show that it is on top of the crisis, public-relations experts say

Taco Bell's attempt at damage control needs damage control. The fast-food chain has responded poorly to this week's E. coli outbreak, experts say, and its bad public relations could hamper Taco Bell's efforts to reassure its customers.

Since Nov. 20 at least 60 cases of E. coli infections have been reported across six states, according to the Centers for Disease Control and Prevention (CDC), most of them linked to Taco Bell restaurants. Forty-eight of those people have been hospitalized, seven with potentially fatal kidney failure, and more cases are likely to be reported. The New York Times reported on Friday that there are at least 169 confirmed E. coli cases, most of them centered on Long Island and in New Jersey. The cause of the outbreak remains unknown, although green onions from Taco Bell restaurants are the suspected source. Both the CDC and Food and Drug Administration are investigating.

This week, the chain temporarily closed at least 60 stores in New York, New Jersey, Pennsylvania and Delaware for cleaning and restocking of all food. Most of the stores were reopened within a day. Taco Bell also launched its own investigation into the E. coli's source, and its private laboratory found E. coli present in some samples of green onions. On Wednesday, Taco Bell removed green onions from all 5,800 of its restaurants.

Yet consultants who specialize in advising companies faced with such crises say Taco Bell's actions are not enough if the Mexican-food chain is to avoid a serious blow to its business.

Taco Bell's president, Greg Creed, has posted three short statements on the restaurant's web site since the outbreak was linked to the chain on Monday. Even those written statements were late in coming, says Timothy Coombs, a crisis management expert at Eastern Illinois University in Charleston, Ill. "The story broke Monday morning and Taco Bell did not have anything up until later that evening," Coombs says. "People were looking for information online and there was nothing there."

Taco Bell may have also confused the public by closing and then reopening restaurants, even though the source of the contamination is still unknown. "Some would say that was a sign of being proactive: closing the store in order to protect the consumer," says Steven Fink, president of Lexicon Communications Corp, the nation's oldest crisis management firm. "But then Taco Bell reopened the stores and nothing had changed. Why did they close the stores and then reopen them? That sends a mixed signal that the company doesn't have a handle on what's going on."

Those lessons were learned by Wendy's, the fast-food chain, in 2005 after a customer in San Jose, Calif., claimed to have found a human finger in her chili. The incident temporarily drove away Wendy's customers and sales plummeted by 50%, according to Fink, who blames much of the drop on Wendy's ineffectual communication with the public.

But the Wendy's finger episode turned out to have been a hoax. Taco Bell faces a more challenging public-relations task, since the E. coli outbreak could raise health concerns about the chain that will far outlast the specific threat.

Fink suggests that Taco Bell replace all of its suppliers until the source of contamination is found. That's what he did while overseeing 2003 E. coli outbreak at Pat & Oscar's, a restaurant chain based in southern California. "Taco Bell needs to send a clear message to the customers that they are going the extra mile to protect them — that has not come across in anything I have seen yet," says Fink.

 Fink, who also oversaw crisis management for the Jack in the Box restaurant chain when its E. coli outbreak in 1993 sickened 600 and killed four children, predicts that Taco Bell's troubles are just beginning. "I can tell you right now there's going to be class action lawsuits, a lot of litigation involved, and health department investigations," Fink says. "It's going to go on for a period of years, and Taco Bell needs to be prepared for it. I don't know whether they are."

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Excerpted from TIME