McDonald’s Japan in Loss with Food Woes

Published By : 06 Feb 2015 | Published By : QYRESEARCH

The operator of the Japan outlets of McDonald’s announced on Thursday that the national branch is experiencing a loss. This is the first annual loss for the branch in 11 years. McDonald’s Japan has suffered in sharp decline in sales till December 2014 amidst growing food safety issues.

In 2014, McDonald’s Holdings Co. (Japan) recorded a total loss of US$186.2 million, or ¥21.84 billion. This comes after a 2013 profit of ¥5.14 billion. The total revenue for McDonald’s Japan dropped from ¥260.44 billion to ¥222.32 billion. This is also the first operating loss for McDonald’s Japan since 2001.

The monthly same-store sales for McDonald’s Japan have recorded more than 10 per cent on-year drops per month after June. It was revealed in July by the Chinese media that Shanghai Husi Food Co., a Chinese supplier, deliberately sold expired meat to multiple restaurant companies, one of which is McDonald’s Japan.

On Thursday, the company also revealed that their same-store sales dropped 38.6 per cent in January alone.

Once the controversy over expired meat was unearthed, McDonald’s Japan immediately stopped sales of all their products made with Chinese chicken. To make matters worse, their sales were hit again by reports of food contamination throughout Japan. This created wide-scale panic amongst citizens regarding food safety.

A human tooth was found in a French fries serving that was sold in Osaka. In another incident, a child in the Fukushima prefecture was slightly injured in December 2013 because of a piece of hard plastic that was embedded in his chocolate sundae. On further investigation, the piece was found to be a part of the machine used to make chocolate sundaes.
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