Dive Brief:
- McDonald’s will invest over $100 million to aid franchisees heavily impacted by the E. coli outbreak tied to slivered onions in Quarter Pounders. The outbreak led to over 100 illnesses and one death.
- That investment will include roughly $35 million for marketing programs that can help drive traffic, the chain said in a memo viewed by Restaurant Dive. The remainder will go to supporting impacted franchisees.
- Last week, McDonald’s said it identified an alternative supplier for slivered onions. All 3,000 restaurants from which McDonald’s removed the burgers have since returned them to menus. About 900 restaurants that were serving Quarter Pounders without onions have resumed selling the burgers with onions.
Dive Insight:
Messaging to rebuild trust among consumers will be key through the end of the year, especially since traffic and sales dipped after Oct. 22, when the outbreak was first announced. This stalled the traffic and sales growth McDonald’s experienced in the third quarter after its $5 Value Meal offer helped bring back customers, especially low-income households.
CEO Chris Kempczinski said during the chain’s third quarter call that McDonald’s will lean into its value offerings, food innovation and digital sales to help regain traffic and sales momentum.
In addition to those traffic drivers, McDonald’s said in the memo that it will use its national voice to help restore trust and build its brand affinity, both nationally and in local markets, per the memo. It will use the additional investment in its national value campaign and “always-on” digital and media plans to drive momentum. The chain launched a national campaign last week under the theme First Bites that will run through the end of the year. That promotion includes the offer of 10 chicken nuggets for a dollar on the McDonald’s app.
In markets that were highly impacted by the outbreak, the chain will help with recovery plans, which will be shared in the next few weeks. This comes in addition to previously announced targeted liquidity support for the most heavily impacted franchisees, according to the memo.
McDonald’s could eventually focus on campaigns that highlight food safety as a way to build trust, experts previously told Restaurant Dive. But this could take time, as the chain hasn’t typically emphasized elements of food safety — like its safety standards and protocols covering handwashing and food prep — in the past. However, many consumers may forget about the outbreak in short order, since it was a one-time incident that was contained relatively quickly.
