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The epidemic of E. coli under control, McDonald’s focuses on next steps
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The epidemic of E. coli under control, McDonald’s focuses on next steps

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McDonald’s CEO Chris Kempczinski said Tuesday that the outbreak of E. coli sickened at least 75 people and led to a death is largely containedand the channel is trying to overcome the public safety incident.

McDonald’s blamed the outbreak on chopped onions from a Taylor Farms facility in Colorado Springs, from which it stopped sourcing onions indefinitely. Testing by the Colorado Department of Agriculture confirmed Sunday that E. coli did not come from the fresh beef patties used in Quarter Pounders. The chain will bring the patties back to around 3,000 stores this week.

“The recent wave of E. coli is deeply concerning and hearing the reports of how it has impacted our customers has been heartbreaking for us. On behalf of the entire system, we are sorry for what our customers have experienced,” Kempczinski said during an earnings conference call.

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

“(McDonald’s) has taken the outbreak very seriously, and assuming the company has accurately identified the source of the problem, we do not expect a long-term impact on the trends,” said Matthew Goodman, analyst at M Science, in an email addressed to Restaurant Dive.

The chain must regain consumer trust and return its U.S. business to the momentum it saw in the third quarter, Chief Financial Officer Ian Borden said.

The chain said national same-store sales increased by 0.3% in the last quarter following a year-over-year decline in the second quarter. The $5 meal deal launched earlier this year attracted more low-income customers, while its Collectors Edition mug promotion sold out in two weeks.

The first three weeks of October saw “near positive single-digit” sales growth in addition to positive traffic, Borden said. After the outbreak, McDonald’s saw negative sales and traffic trends daily.

During the week of October 14, traffic increased by almost 3%, according to Placer.ai data emailed to Restaurant Dive. On October 23, the day after the outbreak was announced, traffic fell 6.4% year-over-year, and traffic fell 9.1% and 9.5% on October 24 and 25, respectively. The declines were even steeper in Colorado, where the outbreak had the greatest impact. Traffic fell 32.6% on October 25, according to Placer.ai.

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

“Historically, food safety events like these can impact visitation trends for an extended period of time,” Hottovy wrote. “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 visitation trends.”

To regain traffic and sales momentum, McDonald’s will rely on its $5 meal offering in addition to food innovation and digital sales, Kempczinski said. The chain expects to have additional LTO available during the fourth quarter and will deploy a global value platform in early 2025.

“It’s going to be about going back to what was working before this very unfortunate event and then supplementing that as necessary with additional activities to make sure we get that customer back into restaurants,” Kempczinski said.