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.
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.
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:
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 . . .
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.
The store at Kounandai isn’t small-scale, is it? If you try, you can offer everything on the menu.
Starbucks will be next, right? There’s too many of them.
Not delicious, yet expensive. I prefer MOS Burger.
That’s because you got rid of the menu and water www
People say they prefer convenient stores these days, don’t they?
Increase Subway instead.
Shouldn’t they first reconsider merchandise organization, cost establishment, and the necessity of 24-hour operations?
Suggestion: Let’s change the CEO
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.
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.
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.
What a novel accomplishment to push the headquarter’s failures on stores.