McDonald’s spends $100 million to lure back customers after E. coli outbreak

New York
CNN
—

McDonald’s is spending $100 million on marketing and to help franchisees hardest hit by a recent E. coli outbreak that sickened more than 100 people and hurt sales.

In a memo sent to employees and obtained by CNN, McDonald’s is spending $35 million on marketing, which includes a value deal focused on its chicken nuggets, plus $65 million targeting franchisees who have lost business in states where the outbreak happened.

Visits and sales took a dive in October after the Centers for Disease Control and Prevention and the Food and Drug Administration said fresh onions served at Quarter Pounders were the likely source of an E. coli outbreak.

More than 100 people were sickened in 14 states, and several lawsuits have been filed against the chain. Shares of McDonald’s (MCD) fell about 7% over the past month.

“The relevance, trust and love of the Golden Arches has been hard-earned over nearly 70 years of our unwavering commitment to doing the right thing. The past three weeks have only further exemplified that,” said the memo, which was signed by Michael Gonda, the chain’s chief impact officer for North America, and Tariq Hassan, chief marketing and customer experience officer.

McDonald’s has said that recent tests showed no E. coli in its food, and in the memo it noted that its Quarter Pounder burgers topped with sliced ​​onions are now back on menus nationwide.

In an earnings call after the outbreak, CEO Chris Kempczinski said the chain is “ready to do more if we need to, to make sure we bring McDonald’s full resources” to winning back customers.

The new marketing campaign includes TV ads touting a 10-for-$1 McNuggets deal that can be redeemed weekly in the app until early next month. The chain is also continuing its successful $5 meal deal.