McDonald's (NYSE: MCD) is pulling out all the stops to rebuild its reputation and lure customers back after an E. coli outbreak linked to slivered onions in its Quarter Pounder hamburgers. The fast-food giant has reportedly earmarked $100 million for recovery efforts, including marketing and franchisee support to address the fallout.
The outbreak infected more than 100 people across 14 states, hospitalized 34 and tragically claimed one life, according to the Centers for Disease Control and Prevention. The CDC traced the source to a supplier that has since recalled the product, Business Insider reported. Still, McDonald's is feeling the heat.
The company acknowledged the toll in its third-quarter earnings report, which revealed a decline in-store visits and daily sales as cautious customers stayed away. McDonald's stock has dropped over 7% in the past month. The crisis has had a broad impact on business.
To regain customer trust, McDonald's is spending $35 million on marketing campaigns, including a new TV ad promoting a limited-time offer of 10 Chicken McNuggets for just $1 via the McDonald's app. The campaign aims to draw customers back with deals that highlight familiar favorites.
An additional $65 million is being directed to support the franchisees hit hardest by the outbreak. These funds will cover operational losses and other costs as local operators work to recover from the health scare's effects on traffic and sales.
Michael Gonda, McDonald's Chief Impact Officer for North America and Tariq Hassan, Chief Marketing and Customer Experience Officer, addressed the crisis head-on in a memo seen by CNN. "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," they wrote. "The past three weeks have only further exemplified that."
The fallout has demonstrated the importance of food safety and customer loyalty in maintaining McDonald's iconic brand. As the company works to restore confidence, the memo clarifies that rebuilding "trust and love" is a top priority.
While the company's recovery plan is strong, the future remains uncertain. Analysts and investors will watch closely to see whether McDonald's can successfully rebound from the crisis and reignite customer enthusiasm. The Golden Arches are betting on turning a tough situation into an opportunity to show resilience and commitment to its customers.