NEW YORK, NY – McDonald’s recent success in increasing U.S. sales through value meals faced a setback as an E. coli outbreak linked to Quarter Pounder hamburgers emerged, potentially impacting the company’s performance in the final months of the year.
During the July-September period, McDonald’s reported a 0.3% rise in U.S. same-store sales, driven primarily by the popularity of their $5 value meal which attracted lower-income consumers back to the fast-food chain. The ongoing success of the $5 deal prompted McDonald’s to extend it until December across most of its U.S. locations. However, the positive momentum was disrupted by the E. coli contamination crisis that led to the removal of Quarter Pounders from around 3,000 stores after the U.S. Food and Drug Administration identified raw onions as the likely source of the outbreak.
In response to the outbreak, Chris Kempczinski, McDonald’s chairman, president, and CEO, expressed deep concern and emphasized the company’s commitment to customer safety during a conference call with investors. While acknowledging the impact of the outbreak on sales, McDonald’s took immediate steps by ceasing onion supply from the implicated supplier and working to reintroduce the Quarter Pounder to all U.S. menus. Despite the challenges posed by the outbreak, Kempczinski remains optimistic about the safety of dining at McDonald’s.
The company’s struggle was not confined to the U.S. market, as McDonald’s faced challenges in countries like China and France during the third quarter. The slowdown in sales prompted strategic responses, such as introducing discounted meal deals and offerings like the Chicken Big Mac. To offset declining sales, McDonald’s focused on enhancing value offerings and exploring new menu options to cater to changing consumer preferences.
Despite a 3% increase in revenue to $6.87 billion for the quarter, McDonald’s net income experienced a 3% decline due to various factors, including acquisition-related costs. The company’s performance exceeded analyst expectations, showing resilience amidst the challenges posed by the E. coli outbreak and global economic conditions. Looking ahead, McDonald’s aims to maintain its focus on value offerings and digital promotions to drive continued growth and engagement with customers.