McDonald’s E. coli outbreak, Krabby Patty promo boosts Wendy’s

Wendy’s gains from McDonald’s health scare

McDonald’s E. coli outbreak sank sales in four of the main states affected, decelerating 7.2 points to -12.5% YoY on a trailing-4 week basis from October 19 to November 2, 2024, according to Earnest Orion transaction data. In contrast, sales accelerated at rival fast food chains (QSRs). Wendy’s, Chick-fil-A, Taco Bell, and Sonic Drive-In sales improved across the region during the week ended October 26. Locations in Colorado, Kansas, Utah, and Wyoming were all impacted were all impacted by the outbreak.

Coming out on top, Wendy’s led the acceleration with a 3.9-point increase, followed by Sonic Drive-In at 2.4 points. 

Wendy’s strong performance is noteworthy as it is not among the top three fast food chains by McDonald’s customer spending. However, the timing of McDonald’s E. coli outbreak may have worked in Wendy’s favor. The health scare coincided with the launch of its SpongeBob SquarePants-inspired Krabby Patty partnership, which likely drove additional visits.

Wendy’s strength also comes amidst an announcement that the chain would close 140 “outdated” and “underperforming” restaurants soon. The closures will be offset by new restaurants in higher performing locations. 

E. coli sinks visits at McDonald’s

McDonald’s experienced a 5.8-point deceleration in transactions, a key indicator of restaurant visits, reflecting a downturn in customer activity. In contrast, competitors Wendy’s and Sonic Drive-In posted positive momentum. Transaction growth accelerating by 4 points and 2.2 points, respectively. This suggests a shift in consumer preferences or an increase in market share for these brands.

On October 28, McDonald’s issued a statement confirming that it would resume sales of the Quarter Pounder without onions. McDonald’s suspects the vegetable was the source of the E. coli contamination. This decision marks a key step in McDonald’s is making an effort to address the situation and regain customer trust. The company is also working to minimize any further impact on its brand reputation and sales performance. Between the outbreak and October 28, Quarter Pounders were not sold anywhere in the US.