E. coli outbreak sparks decline in McDonald's US sales

In late 2024, McDonald's, the global fast-food giant, faced significant challenges in the U.S. market, primarily due to an E. coli outbreak linked to its quarter pounder hamburgers. This outbreak resulted in a notable decline in customer demand, with same-store sales falling 1.4% during the October-December period, a situation exacerbated by consumer fatigue over rising prices. In a bid to regain customer trust and recover sales, the company temporarily halted the sale of quarter pounders in affected areas while working to contain the outbreak. This incident led to at least 104 reported illnesses across 14 states, including one fatality in Colorado, which further amplified the negative media coverage and consumer apprehension surrounding the brand. Despite facing adversity in the U.S., McDonald’s reported stronger performance in its international markets. Sales growth was particularly impressive in regions such as the Middle East and Japan, where the brand had once struggled. For the fourth quarter of 2024, international same-store sales increased by 4.1%, benefitting the company as it sought to offset domestic weaknesses. Global same-store sales saw an overall slight increase of less than 1%, better than the anticipated decline expected by Wall Street analysts. However, challenges persisted in markets like the UK, where McDonald's faced declining customer demand due to broader economic pressures affecting consumer spending. The company’s efforts to revitalize U.S. sales included introducing a $5 value meal in June 2024 that had an initially positive impact, but the E. coli situation significantly undermined those gains by the end of the year. Revenue for the fourth quarter fell to $6.38 billion, below the $6.45 billion analyst estimates, while net income also saw a decline, dropping 1% to $2.01 billion. In response to these setbacks, McDonald’s stock saw fluctuations, exhibiting both declines and gains in trading in the wake of the company's announcements regarding its performance. As McDonald’s grappled with these challenges, the brand provoked ongoing scrutiny, particularly as it faced fresh allegations of sexual harassment among staff in the UK. The CEO acknowledged these claims as alarming and committed to addressing the systemic issues within the company culture. The dual crises of food safety incidents and workplace misconduct have put McDonald’s resilience to the test in maintaining its reputation and customer loyalty during a tumultuous period in the fast-food industry.