McDonalds Japan turns to shrimp burgers

Struggling to boost profits amid increased competition, McDonald’s is adding a new item to its menu in Japan: the shrimp burger.

The 270 yen (€1.96) burger, set to go on sale this month, is the latest effort by the Japan unit of the US fast-food chain to win over Japanese palates – and spark sales.

McDonald’s Japan is also testing other additions, including chicken salad and yoghurt.

The hamburger chain with more than 3,700 stores in the world’s second largest economy has tried everything from tofu burgers to advertising blitzes to coax diners back to the Golden Arches after the company posted a loss in 2002 amid the mad cow scare.

“Many people who used to come to McDonald’s had stopped coming, but they’re coming back,” said Eikoh Harada, who took over as chief executive in 2004.

Profits at McDonald’s Holdings Co. (Japan) Ltd., about 50% owned by the US McDonald’s Corp., have been gradually recovering since its first loss in 29 years in Japan. Although McDonald’s uses Australian beef unaffected by mad cow disease, the fatal brain-wasting ailment, Japanese consumption of beef – and Big Macs – dropped sharply at the time.

The challenge for Tokyo-based McDonald’s, which is still Japan’s No.1 restaurant chain, has been to ward off intensifying competition from a burgeoning spate of discount eateries and convenience stores.

Also, the Japanese market is increasingly problematic for McDonald’s: people are having fewer children while the population is growing older and health-conscious.

Jotaro Fujii, a food business consultant with experience in the Subway sandwich chain, believes McDonald’s is running out of ways to cut costs but still having a hard time raising prices.

“It needs to communicate its true value of American culture and hamburger culture, but now it’s coming off like another cheap store,” Fujii said, adding that people are increasingly turning to low-calorie Japanese dishes as well as to gourmet burgers.

Today’s news conference, held at a McDonald’s in Tokyo, included taste-tests of recent menu offerings such as a grilled chicken sandwich and yoghurt with granola – all a change of pace from the Big Mac.

The shrimp burger developed especially for Japan is a bit similar to the Filet-O-Fish, except it’s filled with shrimp.

Harada denied speculation he may step down amid some criticism that he wasn’t delivering on the turnaround quickly enough.

“I have absolutely no intentions to step down,” he said. “I have a lot of things left to do.”