After containing the E. coli outbreak, McDonald’s is focusing on next steps

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McDonald’s CEO Chris Kempczinski said Tuesday that the E. coli outbreak At least 75 people fell ill and resulted in one death largely containedand the network is attempting to circumvent a public safety incident.

McDonald’s blamed the outbreak on chopped onions at its Taylor Farms facility in Colorado Springs, where the company has stopped purchasing onions indefinitely. Tests conducted by the Colorado Department of Agriculture confirmed Sunday that E. coli does not originate from fresh beef patties used in quarter pounders. Chain will return cutlets to about 3,000 stores this week.

“The recent wave of E. coli cases is deeply troubling for us and reports of the impact this has had on our customers have been heartbreaking for us. On behalf of the entire system, we regret what our customers have had to endure,” Kempczinski said during the earnings call.

Kempczinski said the chain remains committed to food safety and said the last serious health issue at McDonald’s occurred more than 40 years ago.

“(McDonald’s) took the outbreak very seriously and, assuming the company has pinpointed the source of the problem, we don’t expect a long-term impact on trends,” M Science analyst Matthew Goodman said in an email to Restaurant Dive.

The chain must restore consumer confidence and get its U.S. business back to where it was in the third quarter, Chief Financial Officer Ian Borden said.

The chain said domestic same-store sales increased by 0.3% last quarter after a year-on-year decline in the second quarter. The $5 meal deal it launched earlier this year attracted more low-income customers, and its Collectors Edition cup promotion sold out in two weeks.

In the first three weeks of October, PC sales growth was “close to positive mid-digit” in addition to positive traffic, Borden said. Since the outbreak, McDonald’s has seen negative sales and traffic trends on a daily basis.

Traffic was up nearly 3% in the week of Oct. 14, according to Placer.ai emailed to Restaurant Dive. On October 23, the day after the outbreak was announced, traffic fell 6.4% year-over-year, and on October 24 and 25, traffic fell 9.1% and 9.5%, respectively. The decline was even steeper in Colorado, where the outbreak had the greatest impact. According to Placer.ai, traffic dropped by 32.6% on October 25th.

RJ Hottovy, head of research at Placer.ai, told Restaurant Dive in an email that the outbreak could have a lasting impact on sales.

“Historically, food safety events like these can impact attendance trends over an extended period,” Hottovy wrote. “But since the company was able to identify and communicate the source of the outbreak while implementing preventive measures, it should reduce the negative impact on visitation trends.”

To restore traffic and sales, McDonald’s will leverage its $5 meal offer in addition to food innovation and digital sales, Kempczinski said. The network expects additional LTOs to become available in the fourth quarter and will deploy a complete value creation platform in early 2025.

“It will be a combination of going back to what was working before this very unfortunate event and then supplementing that as needed with additional activity to ensure that we get that customer back into the restaurants,” Kempczinski said.