McDonald’s Corp. is spending $100 million in an effort to revive sales and support franchisees after a severe E. Coli outbreak spooked diners away.
In a memo sent to employees and franchisees that was seen by Bloomberg News, McDonald’s said Quarter Pounder burgers topped with slivered onions were now back on menus nationwide and that the company was investing $35 million into marketing and ads. Additionally, the company told Bloomberg it is spending $65 million on programs that support franchisees, like deferrals on rent and royalties.
Foot traffic and sales have taken a beating since the US Centers for Disease Control and Prevention said in October that it was investigating an E. Coli outbreak linked to the fresh slivered onions that top McDonald’s Quarter Pounder burgers. In response to the outbreak, which killed one and sickened more than 100 people, the chain pulled Quarter Pounders from 20% of its more than 13,000 US stores.
In the week ending Oct. 27, sales fell nearly 12% compared to the previous week, according to Bloomberg Second Measure data, which tracks debit and credit card transactions from US consumers. Sales have begun to modestly recover, but are still down from where they were a year ago.
{{/usCountry}}In the week ending Oct. 27, sales fell nearly 12% compared to the previous week, according to Bloomberg Second Measure data, which tracks debit and credit card transactions from US consumers. Sales have begun to modestly recover, but are still down from where they were a year ago.
{{/usCountry}}The outbreak came as McDonald’s had been working to overcome slow sales with splashy promotions and steep discounts. Its $5 value meal resonated with low-income customers in the US and drove guest counts in the third quarter, before the chain was rocked by E. Coli.
Shares of McDonald’s have declined about 7% since the outbreak was announced, erasing nearly all of its year-to-date gains.
Earlier this week, the CDC said 104 people had been sickened in 14 states. In a separate statement on Monday, the Food and Drug Administration said there doesn’t appear to be ongoing food safety concerns related to the McDonald’s E. Coli outbreak.