The 12-Day Toll of McDonald's China Meat Scare: Asia Sales Sink 7 Percent

McDonald’s (MCD) gave warning earlier this week that the food-safety problems that arose in mid-July in China would have a “significant negative impact” on sales, certain to harm performance in Asia and likely to drag down global numbers for the year. Now it has become clear just how badly the China trouble has damaged the burger giant.

Same-store sales in the Asia, Middle East, and Africa region declined 7.3 percent in July from a year ago—and the food-safety issue at Shanghai Husi Food, the McDonald’s supplier in China, came to light with less than two weeks remaining in the month. The problem could very well prove even more devastating over the full month of August.

Even in places untouched by allegations of expired and unclean meat, McDonald’s sales weakened last month. Sale in the U.S. sank 3.2 percent. Europe posted a gain from a year ago, but it was only 0.5 percent. All this translated to a global drop of 2.5 percent in same-store sales for July. Don Thompson, McDonald’s chief executive, said in a statement that his company will now need to “inspire our customers’ trust and loyalty.”

(Bloomberg Businessweek)

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