McDonald's Japan Facing Largest Deficit in Its History

McDonald's Japan Facing Largest Deficit in Its History
Photo Credit: AP/達志影像
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McDonald’s Japan presented their financial statement of the first half of the year on August 12. It states the fast food chain has broke the record for largest deficit since 2001 with a net loss of JPY$ 26.2 billion (approximately US$ 210 million).

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Liberty Times reports, McDonald’s Japan presented their financial statement of the first half of the year on August 12. It states the fast food chain has broke the record for largest deficit since 2001 with a net loss of JPY$ 26.2 billion (approximately US$ 210 million).

McDonald’s Japan revenue of this quarter was JPY$ 85.2 billion (approximately US$ 685 million), which is less than last year by 29.5 percent.

Since last year, McDonald’s Japan has continuously had problems of using expired chicken from China, and its products were mixed with other materials. Japanese people initiated a boycott toward McDonald’s and led to McDonald’s business going downhill.

McDonald’s Japan announced reconstruction measures in April and decided to close 131 stores with poor performance. The costs of shutting down branches were listed as special loss and constituted as one of the reasons McDonald’s went into deficit in the first half of the year.

In July, the revenue of Mos Burger and KFC Japan have grown by 10 percent, and only McDonald’s was running up a deficit of 12.6 percent. It has been almost a year since the chicken meat scandal and the performance of McDonald’s Japan is recovering with the launching of new localized products.

CNA reports, Sarah Casanova, president and CEO of McDonald’s Japan, says at a press conference that the situation will improve and the key to stimulate performance recovery lies in their dishes. She also says the newly-launched avocado burger is selling well. Branches in the Kansai region also say customers that are families have already refluxed.

Casanova also says the deterioration of the first half of the year is as expected. It is estimated that there will be improvement in the second half of the year, so they will maintain the same annual performance expectation released in April.

McDonald’s Japan is considering launching cheese from Hokkaido and grapes from Nagano. Aside from local products, it also plans to promote special products overseas. Analyst of Nomura Securities Kyoichirou Shigemura says, “It’s good for McDonald’s Japan to take the consumers’ taste into consideration. They just might make it through.”

Translated by June
Edited by Olivia Yang

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