McDonald's Drops to Fifth in WSB Rankings Amid E. Coli Crisis and Market Woes

In the latest WSB rankings, McDonald's is positioned at number five, marking a decline of two spots since yesterday. The company is currently grappling with significant market pressures as its shares have dropped 5.12%, marking a three-day cumulative decline of 5.68%, reaching the lowest point since September 2024. This downturn is largely attributed to recent food safety concerns.

On October 22, the CDC issued a food safety alert concerning a serious E. coli outbreak linked to McDonald's Quarter Pounder hamburgers. The outbreak has spread across at least ten states, resulting in 49 infections and one fatality. Among the affected, ten individuals have been hospitalized, including a child receiving treatment for severe kidney complications.

McDonald's has taken immediate action by removing the implicated product from its menu in the affected regions. The initial investigation suggests that shredded onions, supplied by a vendor servicing three distribution centers, might be the contamination source. The company has ceased the sale of these onions and temporarily suspended the Quarter Pounder sales in affected areas.

In response, McDonald's China reassured consumers that none of the products or ingredients linked to the outbreak are used in China, emphasizing their commitment to stringent food safety and quality standards. Since a joint acquisition in 2017, McDonald's China has expanded from 2,500 to 6,500 outlets as of September 2024, with plans to surpass 10,000 by 2028.

Meanwhile, changes in McDonald's China's ownership structure are underway, with Citic Ltd. announcing the sale of its 19.23% stake in McDonald's China, Hong Kong, and Macau operations to Citic Capital. Despite the shifts, Citic Capital remains the majority shareholder.

The unfolding situation has reignited memories of the 2015 Chipotle outbreak, which significantly impacted consumer trust and sales. With similar potential repercussions looming, all eyes are on how McDonald's will manage the crisis and rebuild confidence amongst stakeholders and customers.