McDonald’s E. coli incident last year stopped customers in their tracks, leading to the chain’s worst quarterly sales result since Q2 2020.
U.S. same-store sales dipped 1.4 percent in Q4 due to an outbreak linked to slivered onions on Quarter Pounders in October. But the burger giant instructed investors not to expect this type of performance going forward. In fact, financial figures have already turned around.
Before the mishap, McDonald’s U.S. experienced mid-single-digit same-store sales growth, with traffic growth slightly below that. As news spread about E. coli, the company hit a low point in early November. However, for the rest of the month and into December, McDonald’s saw continued improvement in traffic, including slightly positive guest count growth for December and a positive guest count gap to most near-end competitors for the fourth quarter. That momentum has continued into the first quarter.
The chain expects to be fully recovered by the start of Q2. The effects of E. coli are now localized to the hardest-hit areas, such as the Rocky Mountain region. Those DMAs continue to see sales slumps compared to pre-outbreak figures. The rest of the U.S. isn’t feeling an impact.
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The key to McDonald’s recent growth has been a combination of value, product news, and digital strength. The company kept its $5 Meal Deal throughout the fourth quarter, in addition to rolling out the Chicken Big Mac—which helped generate chicken market-share growth in the U.S.—and bringing back the McRib in December. It began Q1 by announcing the McValue menu, a platform housing all of the chain’s value deals: in-app offers, local food and drink specials, a new Buy One, Add One for $1 offer at breakfast and lunch/dinner, and of course the meal deal.
“What you’re seeing is, you’re seeing that we are driving [guest counts] and stealing share from a [guest count] standpoint,” CEO Chris Kempczinski said during the Q4 earnings call. “But not surprisingly, particularly now as we’re into Q1 and we’re launching a broader McValue platform, [guest counts] are running ahead of check. And that’s very much consistent with our experience as you’re putting in new value programs, you will see check run ahead of [guest counts] … And then as you get that sort of bedded down and you introduce food news and other things on top of that, you get the one, two punch of check plus [guest count] growth. So that’s what we’re expecting in the U.S.”
Chicken will be a major focus of McDonald’s future menu innovation. The chain will bring back Snack Wraps, drop in the Chicken Big Mac as an LTO over time, and launch a new chicken strip offering. The company believes it can add another point of chicken market share by the end of 2026. Globally, its signature McCrispy sandwich is sold in over 70 markets and will be available in nearly all markets by the end of this year.
“We do have, I think, some very exciting food news, food innovation coming in the U.S., but my U.S. team would kill me if I gave any more details about the when and the exact specifics of how we’re going to plan on doing that, but certainly expect that to come online later in the year,” Kempczinski said.
When it comes to price point appeal, McDonald’s reported improvement in its leadership of value and affordability thanks to the $5 Meal Deal and the BOGO $1 offer. Both are increasing the average transaction amount because guests are adding items beyond the promotional deal. Checks that include the $5 Meal Deal are north of $10 on average.
Additionally, the BOGO offer has been well received at breakfast, helping McDonald’s take share in the morning. Further promotions/innovation are on the way for the breakfast daypart.
“If you think ahead a little bit, this will be the 50th anniversary of breakfast in the U.S. this year, and I think there’ll be some really kind of interesting and exciting things that the U.S. business does over the next little while around breakfast,” said CFO Ian Borden. “So more to come on that later.”
Kempczinski is also optimistic about opportunities in beverages, especially when it comes to hot and iced coffee, refreshers, and energy drinks. McDonald’s is learning primarily through CosMc’s, its drink-forward spinoff concept. The chain announced in January that it would shutter larger CosMc’s locations and move forward with additional smaller units.
“I think we’re continuing to learn there. And as we kind of further refine our plans, I think you’ll hear more from us about how much of that opportunity needs to come through new units with something standalone like CosMc’s or how much of the potential do we think we can capture by doing more within the existing restaurants,” Kempczinski said. “And there’s a lot of work going to thinking about what we might be able to do to capture that opportunity in the current restaurant. So our focus is still very much on it.”
In terms of digital growth, the total number of 90-day active users has reached over 170 million across 60 markets, with systemwide sales to loyalty members totaling approximately $30 billion in 2024.
Borden said Q1 should be McDonald’s lowest-performing quarter all year. First, the brand is working through the remaining effects of the E. coli turnaround. Second, the chain is lapping a leap year, and the restaurant industry overall has experienced a sluggish start to 2025. The CFO said operating conditions should gradually improve throughout 2025.
Although McDonald’s dealt with inflation, investment in value, and the E. coli incident in 2024, U.S. franchisees still achieved cash flows north of $500,000 per unit. Also, while the industry saw double-digit declines in lower-income-consumer traffic in Q4, the brand saw its highest share of lowest-income consumers all year in Q4.
Global comps increased 0.4 percent in Q4. International Operated Markets (i.e. the U.K., Canada, France, and Germany) increased 0.1 percent and International Developmental Licensed Markets (i.e. China, Japan, Brazil, and India) grew 4.1 percent. For fiscal 2024, global comps dipped 0.1 percent. The U.S. lifted 0.2 percent while IOM dropped 0.2 percent and IDL dropped 0.3 percent.
McDonald’s finished 2024 with 13,557 U.S. restaurants, a net gain of 100 year-over-year. It also had 29,920 international stores, 1,555 more than a year ago. The brand had 43,477 systemwide at the end of 2024 and should reach 50,000 by the end of 2027.
Globally, the chain plans to open approximately 2,200 restaurants in 2025. Roughly 550 will open in the U.S. and IOM while more than 1,600 will open in IDL, including about 1,000 in China.
