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McDonald’s sales hit by food-safety scandal
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MCDONALD’S said yesterday that a key global sales figure fell 3.7 percent in August, driven lower as the world’s biggest hamburger chain’s unit that includes the Asia-Pacific region dropped 14.5 percent due to a food-safety scandal in China.
That unit also includes the Middle East and Africa.
McDonald’s Corp said earlier this month that it will monitor its suppliers in China more closely after a food-safety scandal in the country hurt its sales and reputation. The announcement came after a TV report in July showed workers at McDonald’s supplier Shanghai Husi Food Co — a division of US-based OSI Group Inc — repacking expired meat. McDonald’s stopped using the plant in Shanghai.
McDonald’s is not the only fast-food company to be hurt by food-safety woes in China. Yum Brands Inc, whose brands include KFC and Pizza Hut, has also stopped using meat from the Shanghai plant and said its outlets cut all ties with OSI in China, the US and Australia.
McDonald’s anticipates the China scandal will hurt its third-quarter results by about 15 US cents to 20 cents per share compared with its year-ago results. The company said that it will update its 2014 financial guidance when it reports its third-quarter results in October.
In the US, sales at established sites in operation at least 13 months fell 2.8 percent in August. The figure dipped 0.7 percent in Europe due to weakness in Russia.
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