McDonald’s spends $100 million to lure customers back after E. coli outbreak
The slivered onions on McDonald's Quarter Pounder burgers have been linked to an E. coli outbreak.
By Jordan Valinsky, CNN
New York (CNN) — McDonald’s is spending $100 million on marketing and to help franchises most heavily affected by a recent E. coli outbreak that has sickened more than 100 people and damaged sales.
In a memo sent to employees and obtained by CNN, McDonald’s is spending $35 million on marketing, which includes a value deal focused on its chicken nuggets, plus $65 million directed toward franchisees that have lost business in states where the outbreak happened.
Visits and sales took a nosedive in October after the Centers for Disease Control and Prevention and the Food and Drug Administration said that fresh slivered onions served on the Quarter Pounders were the likely source of an E. coli outbreak.
More than 100 people got sick across 14 states and several lawsuits have been filed against the chain. Shares of McDonald’s (MCD) slipped about 7% over the past month.
“The relevance, trust, and love for the Golden Arches has been hard-earned over nearly 70 years by our unwavering commitment to do the right thing. The past three weeks have only further exemplified that,” said the memo, which was signed by Michael Gonda, the chain’s chief impact officer for North America, and Tariq Hassan, chief marketing and customer experience officer.
McDonald’s has said recent tests showed no E. coli in its food, and in the memo noted its Quarter Pounder burgers topped with slivered onions are now back on menus nationwide.
In an earnings call after the outbreak, CEO Chris Kempczinski said the chain is “ready to do more if we need to to make sure that we are bringing the full resources of McDonald’s” to win back customers.
The new marketing campaign includes television ads touting a 10-piece McNuggets deal for $1 that can be redeemed weekly in the app until early next month. The chain is also continuing its successful $5 meal deal.
The-CNN-Wire
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