McDonald's U.S. Sales Drop: A Deep Dive

McDonald’s has reported its biggest U.S. sales decline in nearly five years, with a 1.4% drop in comparable sales for the fourth quarter of 2024. This significant decline has been attributed to a combination of factors, including a brief E.coli outbreak and cautious consumer spending.

The E.coli Outbreak

The E.coli outbreak, which began on October 22, 2024, forced McDonald’s to temporarily suspend sales of its Quarter Pounder hamburgers in approximately 20% of its 14,000 U.S. restaurants. The outbreak resulted in hundreds of illnesses and at least one fatality. The U.S. Centers for Disease Control and Prevention (CDC) concluded its investigation in early December, and McDonald’s removed the contaminated raw onions from its supply chain.

Consumer Spending and Traffic

Despite McDonald’s efforts to attract customers with limited-time offers and meal deals, such as the $5 value meal launched in June 2024, consumer traffic only saw a slight increase compared to the previous year. However, this increase was offset by a smaller average amount spent per customer per visit1. Analysts have expressed concern over McDonald’s overreliance on discounts, which now account for over a third of sales.

International Performance

While McDonald’s faced challenges in the U.S., its international markets showed some resilience. Sales in international markets rose by 0.1%, with notable growth in the Middle East and Japan1. This helped offset some of the decline in U.S. sales, with global same-store sales rising by 0.4% for the quarter.

Financial Impact

McDonald’s reported a 5% drop in net income to $2.04 billion on an adjusted basis, falling below analyst expectations. The company’s revenue also fell slightly to $6.38 billion, missing analyst estimates of $6.45 billion3. Adjusted earnings per share stood at $2.83, slightly below the predicted $2.85 per share.

Moving Forward

McDonald’s CEO, Chris Kempczinski, stated that the company is focused on growing market share and regaining customer confidence. The company has intensified its marketing efforts and introduced the new “McValue” menu in January 2025 to win back consumers.

The road ahead for McDonald’s will involve addressing the challenges posed by the E.coli outbreak and finding a balance between attracting customers with discounts and maintaining franchise margins.