McDonald’s Battles to Regain Customer Trust After Deadly E. coli Outbreak
The Centers for Disease Control and Prevention (CDC) has officially declared an end to the E. coli outbreak linked to McDonald’s, which infected 104 people across 14 states. The outbreak, which began over a month ago, resulted in 27 hospitalizations and one fatality in Colorado.
Fresh Slivered Onions Identified as Likely Source
The CDC pinpointed fresh slivered onions served on Quarter Pounders and other menu items as the probable cause of the outbreak. As a precautionary measure, McDonald’s temporarily removed these burgers from some locations, but has since reinstated them.
Sales Fallout Continues
Despite the outbreak being formally over, McDonald’s is still grappling with the aftermath. According to a research note from Gordon Haskett, foot traffic to its U.S. restaurants declined by 6.6% on November 18 compared to the same period last year. The 10 states initially connected to the outbreak have seen steeper declines, with a combined fall of 9.5% on November 18.
Marketing Push and Franchisee Support
To mitigate the damage, McDonald’s is planning to invest over $100 million in marketing and targeted financial assistance for affected franchisees. The company is also introducing new menu items, including the return of the popular McRib and a new McValue menu in January, aimed at appealing to price-conscious consumers.
Regaining Customer Trust
In an internal memo, Michael Gonda, McDonald’s North American chief impact officer, and Cesar Pina, the company’s North American chief supply chain officer, emphasized the need to “remain laser focused on regaining our customers’ hard-earned trust and reigniting their brand affinity.”
Share Price Impact
McDonald’s share price has fallen 7% since the CDC linked the chain’s Quarter Pounders to the outbreak, with a current market cap of $209.6 billion.
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