McDonald’s to Close 110 Branches in Japan As Profits Fall

McDonalds says goodbye to 110 Japanese branches

McDonald’s has maintained its popularity in Japan for many years, despite significant competition from Japanese fast food chains. However, as this recent article suggests, following the events of 2011, McDonald’s Holdings Japan has decided to close 110 branches in order to cut company losses in the face of falling profits. The article was extremely popular among netizens; below, we bring you a selection of comments from Twitter and Hatena.

From Yahoo!News.co.jp:

On November 1, McDonald’s Holdings Company Japan,revealed that it will close 110 stores within the next year. Profits are rapidly declining through things such as a 2.2% decrease in sales by the end of September in stores that had seen positive growth for eight years prior to the last period (December 2011), and the company is planning to take measures to relieve the problem.

Since the 2011 Tōhoku earthquake and tsunami, McDonald’s has faced severe competition from retail chains that are providing better ready-meal alternatives to home-cooked food, as well as money-saving home-cookers. Eiko Harada, CEO of McDonald’s Japan stated with a severe expression on his face that, ‘The forecast was wildly inaccurate’.

Stores with bad profits, such as small stores that cannot offer all the menu items, will be closed. The closing cost of about ¥1.4 billion will be included in this term’s balance sheet. The company had already closed 433 stores in 2010 to strengthen profitability, but since, according to Harada, ‘McDonald’s is more sensitive to our customer’s sense of satisfaction after the earthquake’, they have decided that further optimization was necessary.

A Japanese branch of McDonald's closes after 30 years.

A Japanese branch of McDonald’s thanks customers as it prepares to close after thirty years of business.

Between July and September this year, the recovery from last year’s slump from the earthquake and electricity conservation has not been as large as expected. In addition, delivery service will be expanded from the current 17 stores to 250 stores in the next term to fight ready-meals and domestic dining.

According to the company’s consolidated balance sheet published today, the existing stores’ sales has decreased 1.1% to ¥220.7 billion, and their operating profits has decreased 17.8% to ¥17.7 billion. The performance leaves the current prediction unchanged, but the hurdle for success is high.

Comments from Twitter:

k:

Part-time workers discharged en masse w Delivery service? w Sales will drop even more w

陵あかり:

It finally happened . . . It’s sad that they’re closing, since they’re convenient. I don’t go there that often, but I do feel like eating there sometimes, and I go to the drive-through on the way sometimes . . .

kkokubun:

They have to be more unique than stores like MOS Burger. Just depending on customer satisfaction will be difficult in the future. The product’s smell is the most important.

たかば.co.jp:

The store at Kounandai isn’t small-scale, is it? If you try, you can offer everything on the menu.

片岡キュアマリン:

Starbucks will be next, right? There’s too many of them.

ケンピー:

Not delicious, yet expensive. I prefer MOS Burger.

山田英之:

McDonald’s should continue being expensive, forever w They should become the “Anti-Starbucks” after closing many stores ww

津軽nɹɐƃnsʇ‾ʇǝɾɐnbɐ:

That’s because you got rid of the menu and water www

りらぽよ(*・ω -*)♡足で感じる愛:

People say they prefer convenient stores these days, don’t they?

From Hatena::Bookmark:

manaplus:

Increase Subway instead.

gomi53:

Shouldn’t they first reconsider merchandise organization, cost establishment, and the necessity of 24-hour operations?

shaoran000:

Suggestion: Let’s change the CEO

xsinon:

The pricing is too far off the mark. Choosing the high-quality route will lead to failure. If it costs more than ¥500, I’ll dine elsewhere.

carl_s:

Their pitch was ‘Bad taste, but cheap,’ but nowadays it’s ‘Bad taste, and expensive,’ so it can’t be helped. People go to stores with ‘About the same price and good taste’ in recent years.

ribot:

I don’t have a habit of eating bread except sweetened buns, so personally I don’t have any problems with McDonald’s closing many stores. I do wonder if starting deliveries will only increase the employee’s burden, though.

ninosan:

What a novel accomplishment to push the headquarter’s failures on stores.

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  • dim mak

    MOS burger actually is better

    I had this one where the buns were made of rice, it was like chinese food… in burger form

    • Anonynonymous

      MOS burger is also a hella more expensive. When you goto McDonald’s you’re really not looking for quality. They each serve different purposes.

    • Butsu

      I seem to be one of the few people who does not agree. Only burger I like is the chiken teriyaki but you can’t get it in a bigger size, so I’m always hungry after eating MOS.

  • Sad for the workers, but im glad that mcdonalds is decreasing in at least one country

    • 3ayo

      For every one of those 110 stores closed, I’m sure they’re opening more than two in another country. It’s a losing battle. -_-

      • Very true, one just opened down my road. YUK

  • lonetrey / Dan

    Personally, I don’t like to eat McD when I’m in USA. It just makes me feel so fat.
    But when I go to Taiwan to visit my relatives… I start eating up a storm at MOS Burger! 🙁

    Perhaps they can do with either a change in their public image, or start decreasing prices of food…. I remember when their food was so cheap… (cheaper than it is now.)

  • Kate

    Maybe they should move to Korea, every McDonalds I saw there was packed almost all the time and they had home delivery service, it was an hour wait but you could get it delivered to your door….imagine if that were an option for americans…anyway 110 stores = a lot of unemployed people 🙁

    • 3ayo

      If that was an option in the states, obesity would become our #1 threat to national security. 😀

      • Elf Queen

        Unfortunately it is already.

      • Elf Queen

        There are some who deliver in NYC.

  • 3ayo

    Don’t let the door hit ya where the good lord split ya. ^^

  • ChuckRamone

    This sucks. I’ve always liked McDonald’s. It’s comfort food from the days when I always wanted Happy Meals. And McDonald’s Japan usually has awesome campaigns for one-off burgers you can’t get anywhere else. I know they’re not closing down all of them, but still kinda sad.

  • MidniteOwl

    There’s no reason to eat McDonalds in Japan. absolutely none. unless you’re… a fat American somehow comes to mind.

  • GhettoBoy

    MOS Burger is better because it doesn’t have PINK SLIME, duhh.

  • Elf Queen

    Wait a min. If a person has a choice and goes for McD instead of sushi,now that is disturbing.I mean how?

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