A cyclospora outbreak has significantly impacted the restaurant industry, particularly those heavily reliant on fresh greens. Taco Bell, a Yum Brands subsidiary, saw its U.S. same-store sales drop by 2% in the July-September period, a stark contrast to the 7% increase in the prior quarter. Foot traffic at Taco Bell plummeted by 20.8% on July 23 compared to earlier averages, though sales have been steadily improving since bottoming out on July 18-19. The outbreak was linked to shredded iceberg lettuce supplied by Taylor Farms from central Mexico, leading Taco Bell to remove it on July 17 and Taylor Farms to issue a recall the next day.
Other restaurant chains are also feeling the pinch. Salad chain Chopt experienced a 12.2% decline in foot traffic, and Chipotle Mexican Grill anticipates its July-September same-store sales to increase by only 1%, down from its previous expectation of a 3% rise. Sweetgreen, another salad-focused chain, saw weekly spending drop by 10 percentage points compared to the previous year in the first half of July.
The cyclospora outbreak compounded existing challenges for the lettuce industry. Retail prices for iceberg lettuce jumped nearly 20% between January and June, with overall fresh lettuce prices up 33% compared to a year earlier. This surge was attributed to unusually hot weather in Arizona earlier in the year, which disrupted crop maturation, and increased fuel costs impacting the cooling and transportation of perishable produce. Despite the widespread impact, Yum Brands credits Taco Bell's swift response, clear communication, and enticing daily specials for helping to recover customer trust, with their shares rising 3% in morning trading.
