McDonald's says store visits and sales dropped in wake of E. coli outbreak

• McDonald's says daily sales took a hit as some customers avoided its restaurants during the E. coli outbreak.
• Third-party data indicated foot traffic to the chain fell by more than 9% nationwide, with a 30% drop in Colorado.

A number of McDonald's US customers stayed away from the arches last week as news of the E. coli outbreak spread.

The company said Tuesday that daily sales took a hit as customers avoided its restaurants during the health scare.

"We saw that shift to kind of having daily negative sales and guest count results since the beginning of the food safety incident," CFO Ian Borden said during the company's third-quarter earnings call.

Earlier on the call, CEO Chris Kempczinski said that the outbreak, which was first reported on October 22, did not affect results for the quarter, which ended September 30. Borden also said the company does not expect the incident to have a "material impact" on the company's 2024 financial results.

Third-party foot traffic data from Placer.ai data indicated visits to the chain fell nationwide by as much as 9.5% in the three days following the news, with up to a 32.6% drop in Colorado, where the epicenter of the outbreak was identified.

"Historically, food safety events like these can impact visitation trends for an extended period, but because the company was able to identify and communicate the source of the outbreak while implementing preventative measures, it should reduce the negative impact on visit trends," R.J. Hottovy, Placer.ai's head of analytical research, said in a note.

Over the weekend, health officials linked the outbreak to slivered onions from a single supplier, an ingredient ordinarily used on McDonald's Quarter Pounder burgers. The burger chain had already pulled the ingredient from restaurants and later terminated its agreement with the supplier.

McDonald's began resuming sales of Quarter Pounders in the affected areas this week, although some locations will not serve the entrée with onions.

The timing of the outbreak also came on the heels of an uptick in the company's US sales, driven largely by promotions like the $5 meal deal.

"We're going to do what we need to do to get the growth back into the business," Kempczinski said. "I think we can make sure that we're communicating the steps that we've taken, and if there is lingering unease out there, to be able to address that."

While McDonald's share price has not yet recovered to the level it was the day before the news of the outbreak, it has begun to climb up from its Friday afternoon lows.