An E. coli outbreak that sickened McDonald’s customers in 14 states has had a substantial impact on the company’s traffic, according to data from the research firm Placer.ai.
The outbreak wiped out some real momentum at the Chicago-based fast-food giant. A combination of a $5 Meal Deal and various marketing initiatives helped lead to traffic improvements throughout the summer. And then in October, a less-cautious consumer and a Chicken Big Mac improved customer counts even more.
Weekly traffic to the chain’s U.S. restaurants ranged from 2.6% to 3.1% in the first three weeks of October, according to Placer.ai, which collects foot traffic to retailers, restaurants and other businesses.
But traffic declined 6.7% the week of Oct. 21, when news of the outbreak first hit, and then 7.7% the week of Oct. 28. Traffic fell 4.3% and 7.3% in the subsequent two weeks, according to Placer.ai.
The data illustrate comments from McDonald’s executives late last month when they acknowledged that the outbreak reversed sales and traffic improvements.
“If you looked at just the first three weeks of October in the U.S. business, we had comp sales of close to mid-single-digit positive and comp guest counts positive just a little bit below that,” CFO Ian Borden told analysts in late October. “That shifted to kind of having daily negative sales and guest count results since the beginning of the food-safety incident.”
The data also reveals the challenge the company has in the coming weeks as it looks to regain customer count.
The E. coli outbreak sickened more than 100 people in 14 states, with one death, mostly in Colorado and surrounding states.
The outbreak has been blamed on slivered fresh onions from a Taylor Farms facility in Colorado Springs. The onions have all been removed from restaurants, including McDonald’s and other chains, and the outbreak is contained.
But that doesn’t necessarily mean it’s contained in the public consciousness. Though McDonald’s has returned Quarter Pounders, with onions, to its menu nationwide, consumers may take a while to return to the company’s restaurants.
McDonald’s is committing $100 million to recover from the problem, including $35 million in marketing. That includes a national ad campaign plus more value and digital marketing. The company is also providing financial assistance to franchisees in the affected states.
“How we show up right now for our customers is everything,” Michael Gonda, McDonald’s chief impact officer for North America, and Tariq Hassan, chief marketing and customer experience officer for McDonald’s USA, said in a system message earlier this month. “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.”
McDonald’s is running a series of ads the rest of the year highlighting its food and offering digital customers 10-piece Chicken McNuggets for $1. The company is also bringing back its McRib next week and early next year will kick off a new McValue menu, which includes various local, national and digital discounts.
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