In the wake of last month’s E. coli outbreak tied to McDonald’s slivered onions, the fast food giant said it will invest over $100 million to boost restaurant sales and speed up the recovery at impacted franchisees.
Of that total, $65 million will be invested into supporting owners who have lost business, targeting those in the hardest-hit states. Approximately $35 million will be invested traffic-driving programs, including marketing efforts, according to a memo to owners and employees viewed by CNBC.
McDonald’s will also be driving “local recovery plans for highly impacted markets” with more details to come in the weeks ahead, the memo said.
“We have navigated a complex and fast changing situation, moved at an unmatched pace, and showed the true character of our brand through unwavering dedication to the safety and well-being of our customers. As we enter the ‘Recovery’ phase, we will continue to uphold our commitment to do the right thing,” said the memo from McDonald’s Chief Impact Officer Michael Gonda and Chief Marketing & Customer Experience Officer Tariq Hassan.
The Wall Street Journal and Bloomberg earlier reported the recovery investments.
During the company’s most recent earnings call last month, Chief Financial Officer Ian Borden told investors that daily sales and traffic turned negative immediately following a Centers for Disease Control and Prevention announcement that linked the E. coli outbreak to McDonald’s Quarter Pounders. But the company doesn’t expect the situation to have a material impact on its business, executives said.
This week the company completed the return of Quarter Pounder burgers, with slivered onions, to all restaurant menus nationwide after temporarily removing the menu item from some locations, according to the memo to franchisees.
On Wednesday, the CDC issued its latest update on the outbreak, which now includes a total of 104 cases, 37 hospitalizations and one death across 14 states.
The same day the Food and Drug Administration said in a statement that “there does not appear to be a continued food safety concern related to this outbreak at McDonald’s restaurants.”