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McDonald offers shrimp burger in Japan
(AP)
Updated: 2005-10-14 16:10
Struggling to lure customers back amid increased
competition, McDonald's is adding a new item to its menu in Japan: the shrimp
burger. The 270 yen ($2.40), burger, shown to reporters Friday and set to go on
sale this month, is the latest effort by the Japan unit of the U.S. fast-food
chain to win over Japanese palates — and spark sales.
McDonald's Holdings
Co. Japan Ltd. sales crew Kana Hattori shows off the humberger chain's new
addition, shrimp burger, as it is unveiled to the media in Tokyo Friday,
Oct. 14, 2005. Struggling to boost profits amid a price plunge for eating
out, the shrimp burger is to keep a turnaround going, and is testing other
new products, including yogurt and chicken salads. [AP] |
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McDonald's Japan is also testing other
additions, including chicken salad and yogurt.
The hamburger chain with more than 3,700 stores in the world's second largest
economy has tried everything from tofu burgers to advertising blitzes to coax
diners back to the Golden Arches after the company posted a loss in 2002 amid
the mad cow scare.
"Many people who used to come to McDonald's had stopped coming, but they're
coming back," said Eikoh Harada, who took over as chief executive in 2004.
Profits at McDonald's Holdings Co. (Japan) Ltd., about 50 percent owned by
the U.S. McDonald's Corp., have been gradually recovering since its first loss
in 29 years in Japan. Although McDonald's uses Australian beef unaffected by mad
cow disease, the fatal brain-wasting ailment, Japanese consumption of beef — and
Big Macs — dropped sharply at the time.
A major challenge for Tokyo-based McDonald's, which is still Japan's No. 1
restaurant chain, has been to ward off intensifying competition from a
burgeoning spate of discount eateries and convenience stores.
Also, the Japanese market is increasingly problematic for McDonald's: people
are having fewer children while the population is growing older and
health-conscious.
Jotaro Fujii, a food business consultant with experience in the Subway
sandwich chain, believes McDonald's is running out of ways to cut costs but
still having a hard time raising prices.
"It needs to communicate its true value of American culture and hamburger
culture, but now it's coming off like another cheap store," Fujii said, adding
that people are increasingly turning to low-calorie Japanese dishes as well as
to gourmet burgers.
Friday's news conference, held at a McDonald's outlet in Tokyo, included
taste-tests of recent menu offerings such as a grilled chicken sandwich and
yogurt with granola — all a change of pace from the Big Mac.
The shrimp burger developed especially for Japan is a bit similar to the
Filet-O-Fish, except it's filled with shrimp.
Harada denied speculation he may step down amid some criticism that he wasn't
delivering on the turnaround quickly enough.
"I have absolutely no intentions to step down," he said. "I have a lot of
things left to do."
Harada also defended his decision to introduce the 100 yen (90 cents) items,
including the cheeseburger, as critical to coaxing people back to McDonald's.
In the United States, McDonald's offered 99 cent Big Macs, but the discount
menu has shrunk and salads can cost $5 or more. The new chicken salads in Japan,
which aren't offered at all stores, cost 450 yen ($4).
Senior Vice President Pat Donahue, Harada's predecessor, who oversees the
U.S.-Japan partnership said he had faith in Harada and a solid revival takes
time.
"He's clearly turned that decline around," Donahue said. "To permanently turn
our business around and have sustained profitable growth requires rebuilding a
foundation for our business."
Last month, McDonald's Japan lowered its profit forecast for the fiscal year
ending Dec. 31 to 50 million yen ($437,000) profit, down from the earlier
projection for 3.5 billion yen ($31 million) profit, citing temporary additional
personnel costs.
McDonald's Japan shares, which have lost about a fifth of
their value since the summer, were unchanged Friday at 2,005 yen ($17.5) on the
Jasdaq Securities Exchange in Tokyo.
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