McDonald’s Issues Apology Over E. coli Outbreak Amid Falling Sales

McDonald’s CEO Chris Kempczinski issued a public apology to customers affected by an E. coli outbreak in the U.S. linked to the chain’s Quarter Pounders, calling it a setback for the company as it contends with slowing sales. “We are sorry for what our customers experienced,” Kempczinski said. “We offer our sincere and deepest sympathies and are committed to making this right.”

While executives assured investors that the health scare was contained and unlikely to impact sales significantly, they acknowledged the added strain on the company’s performance, as budget-conscious customers dine out less frequently.

The incident has sparked legal challenges, including a proposed class-action lawsuit filed by two customers in the U.S. on Tuesday. Other individuals have also pursued legal action.

“Although we expected a tough year in 2024, our performance has so far fallen short of expectations,” Kempczinski admitted during the company’s latest investor update.

In the quarter ending in September, McDonald’s reported a 1.5% decrease in same-store sales compared to the previous year, marking the second consecutive quarterly drop and the steepest decline in four years. International markets, particularly in the UK, France, China, and the Middle East, were among the hardest hit.

Kempczinski emphasized the company’s commitment to providing “value and affordability” as customers remain cautious with their spending. He noted some success in the U.S. with a $5 Happy Meal promotion and a new chicken sandwich, which contributed to a modest 0.3% increase in U.S. sales.

McDonald’s is now aiming to replicate these initiatives in other markets, offering deals like the “Three for £3” in the UK and a £2.75 breakfast bundle. Executives also reported enthusiasm for the UK debut of the “Grimace” shake, which has attracted customer interest.

Chief Financial Officer Ian Borden expressed cautious optimism, noting progress in several areas but warning that the Middle East business may continue to face challenges due to regional conflict. He added that McDonald’s would hold off on further price increases until business conditions improve, acknowledging “significant resistance” from customers.

The U.S. E. coli outbreak, which has affected at least 75 people, was not reflected in the quarterly results, which showed a 3% increase in revenue to over $6.8 billion but a 3% drop in profits to $2.25 billion.

Borden noted that the health scare had reversed positive sales trends in the U.S., though he remained confident that McDonald’s could restore customer trust. “The most significant events are behind us,” he said. “We are confident in our ability to regain strong momentum.”

McDonald’s resumed sales of Quarter Pounders in affected U.S. locations on Monday after suspending them in about 20% of stores. It also announced the end of its partnership with Taylor Farms, previously the supplier of onions identified as the likely source of contamination.