McDonald’s is allocating $100 million to marketing and franchise support to address the fallout from a recent E. coli outbreak linked to its menu. The outbreak, which has sickened over 100 people across 14 states, has significantly impacted sales and customer visits, prompting the company to take swift action.
According to a memo obtained by CNN, McDonald’s will invest $35 million in marketing efforts, including a focus on a chicken nugget value deal, and $65 million to assist franchisees in states most affected by the outbreak. The funds aim to bolster recovery for locations experiencing sharp declines in business.
The Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) identified fresh slivered onions used in Quarter Pounders as the likely source of the contamination. In the wake of the announcement, sales plummeted in October, and McDonald’s stock (MCD) dropped by 7% over the past month. Several lawsuits have also been filed in response to the outbreak.
McDonald’s executives reaffirmed the brand’s dedication to its customers. “The relevance, trust, and love for the Golden Arches have been hard-earned over nearly 70 years. The past three weeks have only further demonstrated our commitment to doing the right thing,” wrote Michael Gonda, chief impact officer for North America, and Tariq Hassan, chief marketing and customer experience officer, in the memo.
The company reported that recent testing found no E. coli in its food and announced the return of Quarter Pounder burgers with slivered onions to menus nationwide.
CEO Chris Kempczinski, in a recent earnings call, emphasized McDonald’s readiness to take further measures to restore customer confidence. “We are fully prepared to bring all resources of McDonald’s to win back our customers,” he said.
The recovery plan includes a robust marketing campaign featuring TV ads promoting a 10-piece McNuggets deal for $1, available weekly through the McDonald’s app until early next month. The chain is also maintaining its popular $5 meal deal to attract value-conscious customers.
With these efforts, McDonald’s hopes to rebuild trust and revive sales in the wake of the crisis.
SOURCE: http://dew360.net
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