The food safety scandal in China has impacted on McDonald’s July sales.
The fast food chain said global comparable sales decreased 2.5 per cent in July, with steepest decline in Asia Pacific, Middle East and Africa (APMEA) of 7.3 per cent, reflecting the impact of food quality and safety issues at a supplier to McDonald’s and other food companies in China.
Results in China, Japan and certain other markets fell far further even though the scandal occurred towards the end of the month. Those markets represent about 10 per cent of global system-wide sales and negatively impacted the segment’s July comparable sales by over 700 basis points, it says.
In July, McDonald’s came under fire when its supplier, Husi Food, was caught breaking food safety standards when a media coverage showed a staff picking up meat from the floor and mixing expired meat with fresh meat.
It later withdrew meat burgers from sale at its outlets in Beijing and Shanghai to rebuild customer trust and ended its relationship with the supplier.
US comparable sales also decreased 3.2 per cent amid continuing broad-based challenges. Europe’s comparable sales rose 0.5 per cent led by positive performance in France and the UK but partly offset by negative performance in Germany and Russia.
“Although July’s results were not in-line with McDonald’s expectations, we intend to strengthen our performance by addressing the current business headwinds with the discipline and conviction that inspire our customers’ trust and loyalty,” said CEO Don Thompson.
