McDonald's Suffering A Loss Of Customers Amidst E. Coli Outbreak
Recent reports suggest that the E. coli outbreak linked to McDonald's Quarter Pounder sandwich has been responsible for the dip in the fast food chain's overall sales. McDonald's CFO, Ian Borden told investors this morning that sales and customer visits in the U.S. dropped since the onset of the outbreak (via The New York Times).
Data from the previous fiscal quarter, which ended just after news of the outbreak was released on September 30, do not show any decrease in revenue, but since that time, the chain was responsible for serving E. coli-tainted food to 75 customers, which led to one death. The initial response was to strip the Quarter Pounder from menus in the impacted region, because officials were then unsure if the beef patties or the onions were contaminated. However, in a combined effort from the CDC, FDA, and the Colorado Department of Agriculture, slivered onions were determined to be the cause of the outbreak.
Despite its swift response and multifaceted investigation — which led to the Quarter Pounder's reinstatement on menus, nationwide — McDonald's has experienced a dip in sales and traffic in recent weeks.
What does the future hold for McDonald's?
McDonald's was efficient in responding to the E. coli outbreak — the CDC classified their public risk as very low. However, disease outbreaks, especially those linked to popular items at restaurant chains, can cause a significant blow to perception and, in turn, revenue. The New York Times reported that an equity research analyst found that the fast food chain had a 9.5 percent decrease in visitors last week than the same week last year. McDonald's locations in states with direct impact from the outbreak had even less visitors, with decreases reaching up to 33 percent.
Any sustained effects this may have on the company will most likely result from continued media coverage, which may influence consumers to steer away from the chain. However, despite the immediate negative response, analysts told the Times they are projecting this decline in sales to be brief due to the chain's size and reputation.