McDonald’s spends $100 million to regain customer trust after E coli outbreak
Daily News Article — Posted on November 19, 2024
(by Andrea Margolis, Fox Business with AP) – McDonald’s is shelling out $100 million in an effort to lure customers back into their restaurants after an E. coli outbreak infected more than 100 of its customers last month.
The Associated Press reported the investment on Saturday. The intent is to bring customers back to stores after the fast-food giant unknowingly served tainted onions on its Quarter Pounder hamburgers.
[Business Insider reported $35 million of the investment is going toward marketing, including a value deal centering on the chain’s chicken nuggets, according to a memo sent to employees seen by CNN.] The hardest-hit franchises will be given $65 million, the company’s statement said.The move comes days after the FDA provided its latest update about the outbreak, which is linked to slivered onions from Taylor Farms in California. So far, 104 confirmed cases of the E. coli O157:H7 strain have been identified across 14 states.
On Nov. 13, the FDA said that at least 34 hospitalizations have occurred. Cases were reported in Colorado, Kansas and Wyoming as well as portions of Iowa, Missouri, Montana, Idaho, Utah, Nebraska, Nevada, New Mexico and Oklahoma.
Of the 34 hospitalizations, four victims suffered from hemolytic uremic syndrome, which can cause kidney failure.
One death was linked to the outbreak early on, but no additional fatalities have been reported. The last illness onset was on Oct. 21.
“Of the 81 people interviewed, 80 (99%) report[ed] eating at McDonald’s,” the FDA’s update reads. “Seventy-five people were able to remember specific menu items they ate at McDonald’s. 63 of 75 people (84%) reported a menu item containing fresh slivered onions.”
“McDonald’s has reintroduced slivered onions from a different onion supplier into their full menu,” the statement says. “At this time, there does not appear to be a continued food safety concern related to this outbreak at McDonald’s restaurants.”
FOX Business reached out to McDonald’s for comment.
Published at Fox Business on November 17, 2024. Reprinted here for educational purposes only. May not be reproduced on other websites without permission. The Associated Press and FOX Business’ Breck Dumas contributed to this report.
Questions
1. The first paragraph of a news article should answer the questions who, what, where and when. List the who, what, where and when of this news article. (NOTE: The remainder of a news article provides details on the why and/or how.
2. What ingredient/produce contained E. coli?
3. a) What is a franchise?
b) How much will McDonald's give the hardest-hit franchises in the affected states?
4. In how many states were customers affected?
b) How many people were hospitalized as a result of the infection?
5. a) Did the news of the E. coli outbreak cause you to stop eating McDonald's? Explain your answer.
b) McDonald's has reintroduced slivered onion from another supplier. Would you eat a McDonald's Quarter Pounder today? Explain your answer.
6. Read the "Background" and watch the video under "Resources." What do you think of McDonald's plan to regain customers's trust including value items and digital promotions? Explain your answer.
Background
How will McDonald's regain customers' trust?
McDonald's chief executive officer Chris Kempczinski noted that McDonald’s has shifted its focus to “reinforcing trust and getting momentum back,” while “bringing the full resources of McDonald’s to bear to reengage the customer.”
The company confirmed in an email that $65 million will be earmarked to support franchisees who were impacted the most by the outbreak. About 900 restaurants halted the sale of Quarter Pounders while health agencies investigated the source of the outbreak, which was identified as raw onions from a single supplier in Colorado Springs, Colo. McDonald’s stopped sourcing onions from the supplier indefinitely.
Quarter Pounders, one of McDonald’s top-selling items, were taken off of menus for about a week in Colorado, Kansas, Wyoming, and portions of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico, Oklahoma, and Utah.
The remaining $35 million will go toward marketing efforts, including a value deal starring McDonald's signature Chicken McNuggets, CNN reported.
McDonald’s outlined additional strategies during its earnings call to continue recovering from the health crisis, including a shift to “holistic value,” meaning entry-level items and meal bundles offered under a branded platform expected to launch in the first quarter of 2025. Also, the chain will simultaneously promote full-margin promotions to grow check sizes.
Digital promotions are also expected to become a bigger part of the company’s strategy.
“Over the mid- to long-term, digital will become a much bigger part and then we'll obviously bring value to life at an individual level with a lot of data and insights, which allow us to effectively target value that's most relevant for that individual consumer,” chief financial officer Ian Borden said during the earnings call.
“We’re going to do what we need to do to make sure we get the momentum back in the business,” Kempczinski added. (from a Nov. 18 Nation's Restaurant News nrn .com report)