McDonald's Sales Decline After China Meat Scandal

McDonald's has seen a drop in sales worldwide, since the China meat scandal began.(STR/AFP)

US food chain McDonald's has said its global sales declined in July due to the rotten meat scandal in China and persistent weakness in the domestic market.

Global comparable sales of the fast-food giant declined 2.5% in July, as sales in the Asia/Pacific, the Middle East and Africa plunged by 7.3%.

Sales in the US, the company's largest market, continued to decline by 3.2% in July – the ninth consecutive month of negative or flat sales.

Sales in Europe rose 0.5% during the month.

McDonald's had earlier noted that its sales in China, Japan and some other countries were hurt by the recent scandal over rotten meat.

The Chinese local media earlier reported that Shanghai Husi Food, owned by US-based OSI Group, sold chicken and beef past their expiry dates to international food chains including McDonald's, KFC and Pizza Hut.

Shanghai's Food and Drug Administration raided the suppliers' facilities and seized more than 5,000 boxes of expired meat. Police also detained five employees of the firm, including its quality manager.

The scandal has taken its toll on the reputations of food retailers like McDonald's, hitting their bottom lines.

Nine companies including KFC, McDonald's, Burger King and Papa John's reportedly used products ranging from beef, chicken and pork from Shanghai Husi.

Following the outbreak of the scandal, the companies apologised to Chinese customers and said they were taking the products concerned off the shelves.

On 21 July, operations at Shanghai Husi were suspended and all of its meat products were ordered to be removed.

McDonald's has been one of the hardest-hit companies, as it had to stop selling products in Japan and Hong Kong, as well as China.

The Hong Kong Centre for Food Safety is reportedly conducting a probe into McDonald's to find out if the company knowingly sold products made from tainted meat.

When the scandal broke out in China, McDonald's Hong Kong said its products were safe. However, it later admitted that it imported chicken and pork from the Shanghai plant, and suspended sales of products including chicken nuggets and McSpicy burgers.

In the home market, the company is facing stiff competition from rivals such as Burger King and Chipotle Mexican Grill.