McDonald’s ‘meals will subside for some time’ after a number of cases of E.coli poisoning – London Business News | London Wallet

McDonald’s shares are losing almost 7% after a number of cases of E.coli poisoning were confirmed, involving the ingredients of the chain’s burgers, mainly in the central US.

However, one confirmed death is an unprecedented situation. Historically, this is not the first situation of this type at McDonald’s, and each time the decline in share prices or sales resulting from similar ‘scandals’ turned out to be temporary, looking at the long-term horizon.

This time, however, we are dealing with a number of negative factors. After a weaker second quarter of the year, the company has already announced that 2025 promises to be a ‘challenging year’, and an important driver of its growth was the ‘strong’ market in North America, where the ‘$5 meal’ recently debuted.

Looking at the historical examples of E.Coli poisonings at Chipotle (2015) and Jack in The Box (1993), comparable sales in the first case stabilized only after 1.5 years, and in the second case they fell for 4 quarters in a row.

We can expect demand for McDonald’s meals to actually subside for some time as shares slide from all-time highs. Another aspect is the actual number of victims, which may increase, and possible legal costs. In the long term, however, the situation does not threaten the foundations of the chain’s business, and consumers are aware of the scale at which McDonald’s operates. Taking this into account, individual cases of poisoning do not invalidate the standards throughout the company. Nevertheless, the confirmed death may capture the imagination of consumers looking for alternatives to the Internet.

Indeed, the E.coli problem came at an unfortunate time for the Trump campaign. A few days earlier, the Republican leader played the role of a chain employee and served its customers. However, the impact of this combination of events on the campaign results seems not obvious.

Trump’s quotations on Polymarket did not even budge after reports of E. coli poisoning, and it seems that McDonald’s shares may be more at risk of falling than the former US president. The company will present its results on October 29, and if they also disappoint, we can expect a stronger downward impulse.