The collapse of McDonald’s Japan continues as the company recorded declining year-over-year sales for the 12th consecutive month at the end of March. The situation is dismal, as whatever the company does seems to end in failure.
Its 100-yen menu and free giveaways no longer impress customers who have grown accustomed to deflationary pricing. Its “Food in 60 seconds or next burger free” campaign, which the company initiated in January as a measure to help revive fortunes, also failed to deliver. And there doesn’t appear to be any light at the end of the tunnel. Its most recent venture, free gum and other “unique” gifts to purchasers of breakfast sets, has been roundly criticized on the Internet as being a “hackneyed idea.”
Just a few years ago the company was bringing in new and innovative services one after the other under the direction of new president and chairman, Eiko Harada, 64. Harada had left his position as president of Apple Japan to join McDonald’s in 2004, bringing about a v-shaped recovery at the floundering fast-food retailer which came to be referred to as “Harada Magic.”
Harada, calmly analyzing the company’s current woes, said, “The biggest reason behind our failure is our declining creative ability. We have not been able to astonish our customers.” How true. What has happened to the “Harada Magic?”
Kitaro Tanaka, a journalist who has been investigating the company’s business, offered, “The novelty of its seasonally-limited, high-priced menus, such as the Big America ALL STARS series, has worn off. Its business model of drawing in customers with loss-leaders and then having them upgrade to higher priced offerings has collapsed. Additionally, young people are starting to use 24-hour stores as late-night Internet cafes, buying one 100-yen coffee and taking up seats for hours on end, making it difficult for business people to use the locations. Such things are driving down average customer spend and leading to decreased sales, creating a vicious circle that can’t be broken. Harada, who has won acclaim as a talented business manager, must also be feeling exhausted.”
Source: Livedoor News
Read more stories from RocketNews24. -- McDonald’s Japan to Close 110 Stores, Expand Home Delivery Service in 2013 -- McDonald’s Japan Gives Away Free Breakfasts to Ease Monday Blues -- Starbucks Japan Reduces Amount of Brew in Some Offerings
© RocketNews24
79 Comments
Login to comment
GG2141
I guess it never occurs to them that people have just become sick and tired of their otherwise excellent product.
I go to McD's quite often because I know exactly what I will get and it is cheap, but at the back of my mind, as I walk through those golden arches, I'm thinking "Oh! not the clown sludge again!! when will a Taco Bell open up near here??"
SimondB
All empires eventually collapse.
BertieWooster
Why people eat this muck at all when there is so much excellent food in Japan beats me.
Bye, Mac!
Moonraker
I have not even set foot in one for 17 years and I can't say I feel in any way deprived. Kick the habit. You will survive.
kimuzukashiiiii
Bertiewooster - absolutely agree!
Its disgusting, and actually not that cheap at all, with the exception of the 100¥ menu. If you order a "set" at lunch, you will often be paying much more than if you went to a local lunch restaurant.
Although I will admit for having a weak spot for macdonalds fries...
Speed
They now seem to have way too many chicken burgers and variations of the hamburger.
They should try introducing a McPizza. A mini one person pizza for 200 yen. A shrimp burger. An avocado burger. Mash potatoes (since KFC in Japan doesn't.) A chicken curry burger.
sakurala
I don't eat there but I think they need to focus on their product rather than other random tricks. Focus on getting a selection that will appeal to the health conscious, OLs as well as business men. Then market based on those demographics. And from what I've heard, they should return to displaying their menu on the wall like before.
JoshuYaki
I remember when I was in japan 10 years ago, McD's was announcing that they would be doubling the locations in Japan.
It's good to hear that the Japanese people didn't want to go to eat there twice as much.
I have to say that it was way too easy for Japanese companies to copy the good parts of McDonalds and make an even better product. Good for them
papasmurfinjapan
Well the tainted Chinese chicken scare hasn't helped business. I know plenty of Japanese who have boycotted McDonalds after learning that they not only use chicken from China, but purchase their chicken from a Chinese company that is being investigated for processing chickens containing excessive chemicals.
Kitti Vongsay
I used to go regularly to Macdonald's but since it is now almost impossible to find a seat with all those people staying for hours with just one small fries or coffee, my business went to other conventional japanese "fast food". In other countries, the staff would make you understand that you need to leave..
Moonraker
Really? Like, if you eat at McDonald's you worry about the provenance of their ingredients? Who'd a thought it?
papasmurfinjapan
Well, I don't think they'd care if you told them they were eating fatty, greasy, artery clogging junk food.
But if you told them their chicken nuggets were laced with chemicals and quite possibly chickens with avian flu, then that would turn most people off, would it not?
SauloJpn
Maybe this is a the same trend that has plagued the rest of the economy. McDs had avoided the other economic crisis by offering cheaper ways to eat. Now even those discounts have not worked to bring people in.
Onniyama
Never go there. Good riddance! (hopefully)
Frungy
I don't eat McDonalds generally, but I visited one a couple of months ago because I was hungry and curious. I ordered a crispy chicken burger and a salad. The chicken burger was drenched in some unknown sauce that tasted a bit strange, and the salad was 90% lettuce and tasted watery... so I put on a bit of the dressing they provided... that was okay, it masked the watery (frozen then defrosted?) salad, but it was full of oil and I used about a quarter of the huge packet of dressing. Out of interest I fished out my bill and was surprised to see that I could have bought two nice onigiri for what I paid for that muck.
I'd sum McDonald's problem up in one word, "uncompetitive". Uncompetitive in terms of price (2 onigiri vs a watery salad and strange chicken burger). Uncompetitive in terms of taste (oil and strange sauce vs the cleaner flavours of even the cheapest convenience store food). Uncompetitive in terms of health benefits (oil, oil, oil vs the low fat Japanese foods). Uncompetitive in terms of service (McDonalds staff are nice, but the pressure during the 60 second campaign made for bad service, and they seemed to be a lot more interested in the drive-through customers than me vs the pleasant smiles and relaxed atmosphere at my local convenience store).
Just plain uncompetitive.
borax
Going to a burger shop and judging them based on their salad is like going to an izakaya and complaining the oolong tea is watered down.
TokyoGas
The McD's near was remodeled and they installed about 30 or so plugs for laptops/phones. It is very convenient and I have used them during the cold winter nights. But, I felt guilty about just spending 100 yen, so I bought a meal set.
sangetsu03
WTF? The main reason I don't go to McDonald's is that it is hard to get a seat, and in many restaurants, even if I do find a seat, I often have to endure the stench from the smoking area. Another issue is the price, which is a full 1/3 higher than McDonald's elsewhere in the world.
No doubt McDonald's is still earning a good profit in Japan, despite setbacks. They are a growth-oriented company, but the market in Japan is already saturated with fast food stores, and with the population declining, there is little hope to increase business any further, unless they begin requiring their staff to have children.
Mocheake
Simply stated, McDonald's makes lousy food. Maybe people are starting to pay more attention to their taste buds.
interuni321
There is no mystery as to why McDonalds Japan is failing, here are some glaring problems, all of which were fixed in McDonalds in the UK a number of years ago which led to a massive increase in the number of outlets and their success over the last 5 years or so.
Update your restaurants! What is this? The early 1980s? Most restaurants in Japan look like they haven`t had a lick of paint in 30 years, they often have shabby tiles and outdated decor, broken chairs and tables and are frequently dirty.
Further to point 1, sack Ronald McDonald, outdated, unattractive, unsophisticated and well, frankly creepy.In the UK McDonalds has a 21st century, sophisticated appearance which attracts customers of all ages and even all social classes.
Stop ripping off Japanese customers over unhealthy trans fats. Trans fats have been removed in the US and UK, but McDonalds has refused to remove them from their Japanese branches at the same time, apparently Japanese customers are not as deserving (demanding) as American and British customers and so they think they can get away with such cheapness.
If you have a popular product, dont discontinue it! Remember the big chicken burger? You should be cause they have had it on the menu for 12 months or so, and 6 of those its been plastered over as unavailable, in the meantime they have been trying to sell you much lower quality alternatives.
Price of drinks, especially soda. Why is it 240yen for a large coke?! We all know it probably costs them less than 10yen a cup, indeed they sometimes have offers which bring it all the way down to 100yen! Cheaper drinks would get more people in the door, and people would order more of them.
Make wifi freely available in every restaurant, this has been the case in the UK for years. It attracts business people in particular who may just order your most expensive meal while they are there.
Pay your employees at least slightly more than minimum wage, then you wouldnt have to spend more money and use more space advertising for employees than you do advertising your actual products! Im sick of every tray inlay desperately trying to recruit employees, and every wall plastered with desperate appeals for new employees. It makes me feel guilty about eating there.
Show some consistency with your keitai coupons. One week there are good offers, the next they are a joke, in which case I often don`t even consider eating at McDonalds for several weeks. Or just make your basic pricing more compelling.I get the impression there is a terrible reluctance among the management of McDonalds Japan to make any changes to a brand that they see as foreign and static, as with many Japanese companies aging managers are just hoping the business doesnt bomb in the last few months of their working lives, and dont want to rock the boat just before they retire. Maybe its time for McDonalds head office in the US to come and shake things up properly. McDonalds Japan is not a victim of circumstance, just its own complacency and laziness.
gogogo
Fire their marketing department all the latest ideas have been not thought though.... with 60 seconds or free and removing the menu's their biggest failures.
Giving gum away for breakfast says "my food stinks"
WilliB
No great loss for Toyko if MacD goes under. To the contrary, wouldn´t one MacD-free city on the planet be great?
Argus Tuft
This seems to be what's killing them. I've seen 3 Macs closed down this year all on routes I take to and from work. Passing by them at peak times, lunch and dinner, they appeared to have no vacant seats at all with the majority of customers nursing one item. It's not only high school kids, it's just as often senior citizens with a 100 yen coffee
GJN48
Would you salary men and school kids just please go home? A store is not a library!
CraigHicks
The declining number of children must also play a large role.
jforce
I have no problem with fast food or McDs. I like it once and a while and taking the kids there is kind of a "treat" that I'm sure most of us are familiar with when we were kids. I'm not sure if McDs realizes though that their meals are not competitve, nor should they be. I don't care about special menus, since I know what I want when I go there. Stick to the basics. @Frungy has some good points though. Especially about the drive-thru customers. Also, the grocery stores and such all offer healtheir, cheaper, and - for the most part - more delicious meals. Some ideas: Whynot make a Kids' Playland like backhome? Maybe a coffee bar? Market to the Otaku types (manga or train geeks) Free refills Calorie counts just for the sake of appearing healthy(if they don't have them already?)
Damn I'm craving some fries now
badsey3
With this inflation (Abenomics) prices are going up. What will the mean for McDonald's?
pointofview
Its always cold, unless you request everything to be made fresh. Burgers and fries should be hot. Macs in all the malls are always packed. Maybe thats the new strategy, just put all the stores in malls.
gogogo
Make a new rule to kick out customers doing their homework, reading a book or playing video games!
Maitake
Japanese Ronald McDonald = infinitely scary... just creepy...and really scary
Mark_McCracken
The author declined to quantify the "collapse", instead saying, "The situation is dismal". So, I tried to find out just how "dismal" this "collapse" was.
For the 12 months ended December 31, 2012, McDonald's Holdings Japan's Same-store sales decreased by 3.3%. All store-sales, which are combined sales of company-operated and franchised stores declined by 1.0%.
http://www.mcd-holdings.co.jp/english/news/2013/release-130207.html
sengoku38
The biggest reason for their decline is they don't care about the health of their customers or the ethical production of the food they sell.
Droll Quarry
First off, lets just face the fact... there is something just not quite right about putting thousand island salad dressing on a hamburger.....
BurakuminDes
May I suggest offering McOnigiri©, McTakoYaki© and McNatto© to the menus? As Japanese often say, their tastes are "unique" so maybe the western food menu just is not popular? I also have never been to a McDonalds in Japan.
tsukki
I go there to charge for a bit when my phone battery runs out (darn you, iPhone5!). Oh, but I do order at least 200 yen worth of food.
interuni321
@Maitake
I`m a fast typer and those points are so obvious... the stupidity McDonalds Japan displays winds me up.
tmarie
Same happened at "home". YOu know what they did? Came up wtha menu the public wanted. I wouldn't go near the place as there is pretyty much nothing on the menu I would eat. Where are the salads? Where are the apple slices and milk options for kids? Where are the mcCafes that are everywhere else in the world - with sandwiches and the like? Nothing here really.
pizzatime
Stop the McMadness. This "chain" must end.
UsagitoSaru
Some of the Mcdonalds in my area have closed down. I haven't eaten at a Mcdonalds in the US in years. When I came to Japan it seemed all of my foreign friends thrived on it didn't matter if they were American, Brazilian or Japanese they all wanted to go to Mac..the last time I went there I got pretty sick and have told my friends since that I cannot handle their food. I've very health conscious with what I eat so the less fast food the better. If McDonalds wants to keep customers then they need to add truly healthy foods to their menu and not fake ones.
some14some
2% "forced" inflation has already depressed many businesses and Mc seems no exception.
SamuraiBlue
Just remove some seats and have high counters to stand. Place all the electrical outlets at these eat-in counters and remove all outlets from the seats. For people who wants to stick around for hours on end provide a lounge with free drinks and charge them by the hour. This way you get rid of the students who hordes the seat for free not willing to pay the price.
Maitake
Call it what you want, but it still doesn't deter the tens of thousands of japanese piling up at the drive through everyday for ranchee, especially on weekends (if they still have those).
jj1980
I don't think that ridiculously failed 2 minute meal scheme helped matters much.
sighclops
It's simple. McDonald's has adapted to various pressures worldwide, with things like introducing McCafe to battle Starbucks and sandwich menus to battle Subway. McDonald's in Japan is still very 80s - time for a makeover!
CGB Spender
The food is bad. Tasty but bad. The staff is bad and horribly underpaid ... It's a good thing if a franchise like McDonalds disappears.
ReformedBasher
@BertieWooster
Exactly. Tastes better and cheaper, unless you want to splurge. Even then, It's worth it.
The only time I visit Macs in Japan is if there is no else available. Will get a breakfast deal if I'm up very early and on the road. Otherwise, no way I'm going to pay more for crap food.
sillygirl
Mickie's in the states has quite a few non fried options. That would be a step in the right direction. The only thing they have done is offer canned corn instead of fries with the happy seta.
Tbear
The McDonalds here tastes way better than the stateside McDonald's. Only gripe is the overpriced soda with no option for a free refill. It is always hilarious if you have a full tray of food and try to sit down and everyone else is nursing a coffee and tries not to make eye contact with you!
BertieWooster
Tbear,
God, it must be hideous in the States then!
badsey3
McNuggets (US) have silicone (dimethicone) in them ~~> screwed up my childhood favorite. I like the New premium McWraps $4 (in Europe they have this with shrimp). They do have salads that are healthy options, but I strongly feel burgers and the burger generation are in the past. For Burgers I do like Carl's Junior (California -West Coast) and their little salsa bar.
http://www.mcdonalds.com/us/en/promotions/premium_mcwrap.html
The problem with McDonald's is that you are on a forced menu system. ~~> They cannot change so it is McDonald's own fault. The bento ladies can change daily and hourly and have way more vegetable items (best fast food choice) Even crap bentos from combini's are way better. =Old people go to McDonald's and have coffee and talk since the energetic folk stay away since the energy from this food is low. Young people do the burger/fry/coke (Happy meal prize) thing in their teens. McDonald's = convenience good, energy from food immediate, but not long term and generally unhealthy. Put better, quality energy food (+veggies) on menu and people will enjoy the convenience.
bass4funk
@bertie
As usual, your American hatred rant shows. Leave the emotions out, please. There is a big difference in America and in Japan between the Macs. Interuni321 said it best, he totally encapsulated the entire franchise. Sorry, Japan is really bad at marketing, they had the opportunity to deliver healthier food choices like in the states or the UK, but Japan sells inferior crap, the worst. Now, I'm not a Miki D's fan, but they are a force to be dealt with and with good reason, people for years have gone there for more or less the atmosphere, not for the overall food. The company is a great company, have contributed heavily to charity, sponsored numerous events, including the Olympics and the list goes on. The US does serve healthier selections and more variety of salads and real fruit juices and protein shakes, the Japanese version, does NOT. Their marketing is very bad and when they come out with burger specials, there is nothing special, they just throw stuff together and I just cringe and think to myself, "who comes up with these half wit ideas?" If you want to eat junk food at Miki D's in the states, you have that choice, if you want to healthy products, you also have that choice, but in Japan, it's all bad. The potatoes are always too salty and stale, the OJ is not 100%, as a native Californian, I know this. Japanese MD and corporate, need to look at the US as a model to bring out better ideas and better products, if they don't want and want to give their customers inferior and unhealthy products, that's their choice. MD Japan has nothing to do with MD, US. I can always eat a juicy skinless chicken sandwich with tomato on a honey oats bun, something I could never get in Japan. Do I want Japanese MD to fail, not really, do I want them to being more variety and healthier products, YES!
UsagitoSaru
Badsey I 100% agree. I know in the states they had salads and other healthy things so If I ever found myself at a mcdonalds back home I could choose that but the ones here don't have that type of variety..
UsagitoSaru
haha so many people getting down voted just for wanting to be healthy.
Get Real
well, it is a thread on McDonalds.
Resistance is Futile
sourpuss
Two McD's have disappeared from where I live: the first 3 years ago; the second 1 year ago. Nobody seems to miss them because the only thing they want to do is drink coffee anyway.
It's really not very surprising. The aging population, everybody just wants to have a coffee, a little baked goody and chat with their friends.
Thunderbird2
I've never liked that clown, and the burgers are like rubber. I had a Teriyaki burger there last year (the small branch on the way into Akihabara) and it was sopping wet with more sauce than you'd find in a Carry On film. Like some others have said, with so much healthy and tasty food easily and cheaply available why eat this muck? I never frequent these places in the UK... even before I stopped eating red meat I avoided them.
BertieWooster
bass4funk,
I remember - a real long time ago - going to the States and eating REAL BURGERS from roadside diners.
Utterly amazing!
That was when the burgers were made from steak. You cannot compare this with the chain muck that MacD and the other purveyors of reconstituted offal give us.
I remember REAL PIZZA too and REAL MEXICAN FOOD.
Ed High
Good to see Maccas are failing in Japan - the variety and the quality of food is poor compared to Australia & NZ stores - where they offer a far bigger range of healthier type food. I was quite shocked with the very small range of sad, dry and bland tasting poor excuse for food that was available in my one and ONLY visit to a Maccas shop (They are not restaurants) I bet the medical industry are also happy that they are not doing that well...
Serrano
"The collapse of McDonald's Japan"
Ha ha ha ha McDonald's is nowhere near collapsing, heck, every time I go there it's always crowded with customers.
"McDonald's makes lousy food"
That must be why it's always crowded with customers.
oikawa
I feel like throwing up even when I just think about this disgusting misrepresentation of a "restaurant".
PaulS
I love McDonalds. Great place to sit, relax, good lighting, seating. Many don't know due to prejudice.
realdoll
I stop in to get a Y100 icecream cone after I eat sushi at a nearby sushi place.. and about once every two months I get two or three hamburgers *plain, and dip them in ketchup just for something different. If my cholesterol wasn't high, I'd go more often..
ChibaChick
Produce a better quality product (has anyone ever had a burger that actually looks like the picture??!) and widen the choice to healthier options.
bass4funk
@bertie
Utterly amazing!
That was when the burgers were made from steak. You cannot compare this with the chain muck that MacD and the other purveyors of reconstituted offal give us.
I remember REAL PIZZA too and REAL MEXICAN FOOD.
I understand what you are trying to say and to a point, I agree with you on many foods especially bought and the "mom and pop shops" you get that real authentic cooking that you cannot get from a chain, no doubt, however, many chain stores can still provide quality food and MD used to be famous for having all bad food, but as a worldwide franchise, MD in each country tailored itself to the local taste buds.
In the US MD food quality was terrible, but in the last decade, they have made some and added healthier choices, more skinless chicken sandwiches, oatmeal in the breakfast category, Angus beef and another example: apple pie, in Japan, they are fried, the US baked. These are some of the things that I don't get why Japan doesn't try to change this. In Japan, the chicken strips are always sold with "skin" a dripping with grease, which is a NO, NO in the US.
Fadamor
Our 24-hour McDonalds have signs in the lobby limiting guests to 30-minutes. They aren't standing over you with a stopwatch, but if seating becomes scarce they will make a note of those sitting and using their laptops (with their AC adapters plugged into the store's outlets, natch) instead of eating and ask them to leave.
I don't know what sorts of menu options MickeyD's have in Japan, but here I eat at McD's for lunch almost every day and in the last two months I've lost 14 pounds. I get a GRILLED (not crispy) chicken sandwich (no mayonnaise), a Bacon Ranch salad (substituting the balsamic vinaigrette dressing for the ranch dressing), a milk, and a medium diet soda. No fries. No sugary drinks. It seems to be working for me as part of an overall weight loss regimen. Even if McD's Japan is still using trans-fats, my lunch would still completely avoid them.
Ah So
Try a Burger King Whopper at sunshine city in Ikebukuro and their delicious thicker french fries and you will never go back to MacDonalds again.
Dukeleto
Mac double quarter pounder no cheese, bring my own freshly grated mature cheddar cheese and chutney sauce...makes one hell of a burger. Makes a nice off day treat every now and again.
Ron Barnes
The Community Should Support McDonald,s As it Gives Children a Start in developing Business Skills working in a team and varied skills. The Values of Working For wages learning the value for money . One of my Scouts on a visit to his local Mac,s said he would own it one day ended up owning 4. He is only now 34 yrs old Quite an achievement. He started at mac,s Very young and Learnt from the ground up, He is an Excellent employer of Youth and looks after his Workers, they can continue to work as long as they wish as age is no barrier.
Ron Barnes
Ps I Live in Australia.
billgru
It's great hangover food, all that grease and sugar. Other wise it's horrible junk food!
Canuck35
Wow I had no idea that Mac was in trouble-could have fooled me! I guess I'm part of the problem as I go there on Saturdays to teach English and buy a coffee and end up staying there for 4 hours.
Canuck35
Also, excellent post by interuni321. Shame that most people on here aren't smart enough to realize that.
Magnet
I find that for what you pay these days to get a meal at McDonald's, more than often you can find many, much higher quality alternatives. Take Wendy's for example. They recently reopened in Japan. Their offerings focus on quality, and you can tell. None of those paper thin cardboard patties anymore. No suspiciously shrinking sizes.
Loki520
The fries issue is easy. Just ask for your fries to be UNSALTED. Since they salt them as soon as they come out, that means you'll get a fresh batch. Then, get the little packet of salt and salt it yourself if you want.
Do it all the time, 'cause the wife really enjoys their fries... when they are fresh.
whiskeysour
They have to many stores....
caffeinebuzz
Is it just me, or is that a bloodstained Ronald clapping his hands together with an "Itadakimasu". Cameraman is a goner...
Tessa
Honestly, I think it's a generation thing. We live in the most aging society in the world, and I think that McDonald's Japan should focus on the older generation. I've taken elderly friends into McDonalds and been shocked to discover that they didn't know how to order from the menu, and didn't know how to hold a hamburger so that it doesn't fall apart. Despite the awkwardness however, they liked the food, and wanted to return!
By the way, I've heard rumours of a McDonald's somewhere in Tokyo that caters specifically to elderly people. For example, the fries on the menu are called "jagaimo." Does anyone know of this place?
fannybatter
the mayonnaise in the chicken crisp looks and tastes like rancid jizz. I imagine, anyway. shut-up
DudeDeuce
I agree. When I eat salty food, I chug soda down like no other. I miss refills.
When I was a poor college student in the U.S., there was nothing as good as 29 cent Hamburger Tuesdays and 39 cent hamburger Fridays. The food may be not be up to everyone's taste buds but at least I can still use that extra money I have on more important things like rent, gas and other needs. So people may diss Mickey D's because they became sudden experts after watching that documentary but McDonald's is one of the better places for the pocketbook.