A decline in foot traffic at McDonald’s was observed due to an E. coli outbreak last autumn. This downturn in visits also corresponded with a decrease in profits for the fast food company. During the fourth quarter of the year, sales at US-based McDonald’s locations that had been open for at least a year dropped by 1.4%. This marked a significant shift from the same period in the previous year, when sales had experienced a 4.3% increase. The challenging fourth quarter served to compound the difficulties that McDonald’s had faced throughout the entirety of 2024, with the perception of value associated with the brand diminishing among cost-conscious customers who opted to dine elsewhere.
CEO Chris Kempczinski, in a call with analysts on Monday, acknowledged that the company’s performance in 2024 had fallen short of expectations. Reflecting on the year, Kempczinski noted that McDonald’s seemed to be intertwined with nearly every major news event, underscoring the vast reach and visibility of the brand. The earnings report released on Monday offered investors insight into the extent of the damage caused by the E. coli outbreak, which had affected over 100 individuals across multiple states and resulted in several legal challenges against the chain. The outbreak, traced back to fresh slivered onions used in Quarter Pounders, was declared over by the Centers for Disease Control in November.
Although sales hit a low point in November, they showed signs of improvement in subsequent months. Despite this progress, McDonald’s does not anticipate a full recovery of its business until the beginning of the second quarter in 2025. To entice customers back, the company allocated $100 million towards marketing initiatives during the quarter and introduced a new value menu in January to help reverse the sales decline.
The introduction of the “McValue” menu category is aimed at reigniting growth following a series of lackluster quarters influenced by consumer perceptions about pricing. Despite a 40% increase in the average price of menu items since 2019, McDonald’s asserts that this rise aligns with its escalating costs. Initial feedback on the new menu has been positive, with mornings showing promising performance. McDonald’s, celebrating 50 years of serving breakfast in the US this year, highlighted a recent uptick in market share during breakfast hours.
Looking to the future, McDonald’s plans to open approximately 2,200 new restaurants worldwide in 2025, a quarter of which will be in established markets such as the US. Additionally, the chain will continue to expand its chicken offerings, including the addition of new chicken tenders, the revival of the Snack Wrap, and the reintroduction of the Chicken Big Mac as limited-time offers.
Despite ongoing struggles in the United States, quarterly sales in McDonald’s international development licensed markets experienced a 4.1% increase, with noteworthy growth in regions like the Middle East, where the brand had previously faced boycotts and backlash. Following this
