McDonald’s closes all branches in virus-hit Chinese province

Team Udayavani, Jan 30, 2020, 9:10 AM IST

New York: US fast food giant McDonald’s said on Wednesday it closed all of its restaurants in Hubei, the Chinese province at the epicenter of a virus outbreak that has spread beyond the country’s borders.

The novel coronavirus outbreak traced to the provincial capital Wuhan in central China has killed more than 130 people and infected nearly 6,000 people across the country.

That has prompted factories and businesses to close, airlines to cancel flights to the country and governments to discourage travel to China.

McDonald’s CEO Chris Kempczinski called the situation “fluid” and “concerning,” and said the chain decided to close all of its restaurants in Hubei, which amount to “several hundred.” But three thousand outlets elsewhere in China remain open, he said during a call to discuss the company’s fourth quarter financial results.

“Right now, as you would expect, our priority’s really on our employees, on our customers, doing everything we can to make sure that they are safe and taken care of,” Kempczinski said, adding that the company would establish a special team to deal with the outbreak.

China accounts for nine percent of all McDonald’s restaurants but only about four to five percent of its sales and three percent of its income, he said.

But commenting on the potential financial hit from the virus, he said “its actual impact on our business is going to be fairly small, assuming, again, that it stays contained to China.” There are now 16 countries that have confirmed cases of the SARS-like illness, from the United States to the United Arab Emirates.

American coffee chain Starbucks announced on Tuesday that it had shuttered half of its cafes in China, and Disney shut down its theme parks in Shanghai and Hong Kong.

The McDonald’s announcement came as they reported healthy fourth quarter results, that showed sales growing worldwide by 5.9 percent with revenues of $5.35 billion, compared to the final three months of 2018.

The earnings were the first since chief executive Steve Easterbrook left the chain following a “consensual relationship” with an employee that violated company policy.