In an effort to bounce back from the recent E. Coli outbreak that shook consumer confidence, McDonald’s Corporation is implementing a $100 million strategy to revive sales and provide support to its franchisees. The company has announced the return of Quarter Pounder burgers topped with slivered onions on menus nationwide, following a temporary removal from 20% of its US stores in response to the outbreak linked to these ingredients.
According to a memo seen by Bloomberg News, McDonald’s is investing $35 million in marketing and advertising efforts to promote the return of the popular menu item. In addition, they are allocating $65 million towards supporting franchisees, offering initiatives such as rent and royalty deferrals to help them navigate the impact of the sales downturn.
Since the outbreak was reported by the US Centers for Disease Control and Prevention in October, foot traffic and sales have plummeted, with a nearly 12% decline in sales in the week ending Oct. 27 compared to the previous week. Although sales have slowly begun to recover, they are still trailing behind last year’s figures.
The timing of the E. Coli outbreak added to the challenges McDonald’s was already facing in boosting sales through promotions and discounts. The company’s $5 value meal had shown promise in driving guest counts among low-income customers in the US during the third quarter, only to be overshadowed by the food safety concerns.
Shares of McDonald’s have taken a hit, with a 7% decline since the outbreak announcement, wiping out most of its year-to-date gains. However, recent statements from the CDC and FDA have indicated that there are no ongoing food safety issues related to the McDonald’s E. Coli outbreak, offering a glimmer of hope for the fast-food giant’s recovery efforts.