BURGER King plans to double its number of stores in Japan, as McDonald’s Corp. tries to recover from losses after a series of food scandals there.
The maker of the Whopper sandwich will expand its 98 stores to 200 by the end of 2017, and forecasts sales to grow 15 percent this year after they rose by a fifth in 2015, Burger King Japan’s CEO Yasuyuki Murao said in an interview. Although Ontario, Canada-based Restaurant Brands International Inc. owns Burger King, South Korea’s Lotteria Co. holds the Japan operating license for the brand.
“It would be a tough battle if we compete head-to-head with McDonald’s, running more than 3,000 outlets, but it’s the time for us to grow when our larger rival is having a tough time,” said Murao, a 30-year veteran of McDonald’s Japan before he left in 2012 and became head of Tokyo-based Burger King Japan, a unit of Lotteria, in February 2014.
Burger King, which has struggled to catch on in Asia’s second-largest economy, has reason to see an opening. Losses at McDonald’s Japan widened almost 60 percent to ¥34.7 billion ($304 million) last year as incidents, such as foreign objects found in food, turned off diners, prompting the company to close stores, cut jobs and introduce new items to its menu.
Murao, 57, declined to disclose Burger King’s sales figures in Japan. The restaurant chain held a 0.1-percent share of the country’s market for fast-food market in 2013, ranking it number 20 compared with third-place McDonald’s, according to data from Euromonitor International. Convenience stores dominate the Japanese fast-food market.
Murao, who was involved in business strategy and human-resource planning while he was working for McDonald’s, said Burger King Japan will rely on its wholly owned stores in the capital Tokyo to promote the brand, in order to attract potential franchisees to open more outlets elsewhere in the country. The chain now has 78 wholly owned outlets and 20 run by franchisees and aims to have an equal mix of stores after its expansion, he said.
Burger King Japan’s core targets are male customers in their 30s and 40s and female in their 20s, Murao said. While there’s a trend toward more healthy eating as Japan’s population ages, he still sees potential growth in demand from people who are older than 50 due to an increase in meat consumption by the Japanese.
Demand for seafood has been dropping in Japan, as meat becomes more affordable and widely available. Japanese ate an average 89.1 grams of meat, excluding fish, per day in 2014, up from 77.9 grams daily in 2004, according to a report by the Health Ministry last December. The increase was also among older people, with those at ages between 60 to 69 years old consuming 78.7 grams daily, compared with 60.7 grams a decade ago.
“There may be a global trend for relatively light meals, such as Japanese food, like sushi, but in Japan, people are having more meat,” Murao said. “Even the elderly eat more beef and other meat nowadays.”