Battle of the burgers: McDonald's Japan

Battle of the burgers: McDonald's Japan Sarah L Casanova, President and CEO of McDonald’s Co (Japan)

TOKYO —

The golden arches of McDonald’s are one of the most recognizable icons in the world and nowhere more so than in Japan where the fast-food giant has 3,156 stores and employs over 160,000 crew.

Long-term residents of Japan will remember the opening of the company’s first store in the Ginza Mitsukoshi department store in July 1971. Since then, McDonald’s Japan has gone from strength to strength in the Japanese market, developing human resources at its famous Hamburger University where 8,000 employees annually receive training in management, team building, communication skills, and QSC&V (quality, service, cleanliness and value).

McDonald’s is also heavily involved in charity and sports sponsorship in Japan. The Ronald (Donald in Japan) McDonald House Charities supports children hospitalized far from home and their families; McDonald’s provides food education and work experience; in local communities, it runs “Clean Patrols” to clean up the areas surrounding stores and gives out crime prevention whistles. In sports, McDonald’s Japan supports children’s baseball and youth soccer. For the current World Cup, McDonald’s sent 11 Japanese children and their guardians to Brazil to accompany the Japanese team onto the pitch.

But, of course, everything hinges on the McDonald’s dining experience and these are challenging times for the fast food industry. In 2013, operating profit for McDonald’s Japan slid 53.5% from the previous year to ¥11.52 billion and net profit plunged 60.1% to ¥5.138 billion. System-wide sales fell 4.8% to ¥504.45 billion.

Overseeing McDonald’s Japan operations is Canadian Sarah L Casanova. After obtaining a Master of Business Administration from McMaster University in Ontario in 1990, Casanova joined McDonald’s in 1991. She has worked in Russia/Ukraine, Malaysia and Singapore, before assuming her current position in Japan last summer.

Japan Today editor Chris Betros visits Casanova at the McDonald’s Japan office in Tokyo’s Shinjuku to hear more.

Where are you focusing your efforts this year?

In 2014, we have been focusing on three key areas – enhancing our exclusivity, introducing new initiatives to meet consumers’ demands and modernizing restaurants. Our customers told us that the menu was becoming a little ho-hum and not very exciting. With our exclusivity, our strengths are “Made for You,” “Kids and Family” and “Drive-Thru.” We have been improving restaurant facilities for kids and families to give them the best restaurant experience possible. We’ve also enhanced our breakfast menu to attract more customers. To further meet customers’ needs, we intend to double the number of McDelivery restaurants (133 as of December 2013) in 2014.

What are some unique characteristics of the Japanese market?

Actually, I’ve found that McDonald’s customers are not that different around the world, though every market has some differences in taste preferences. In Japan, one of our best sellers is the Teriyaki Burger which is a Japanese flavor done in a Japanese way. However, the core menu remains Big Macs, Double Cheeseburgers and Egg McMuffin. Our French fries are as loved here as they are anywhere else.

Japanese consumers love new items, and you see this not just in fast food restaurants. So we introduce a lot more new menu items in Japan than we would in other McDonald’s markets. An example of that is the World Cup menu—every single item is brand new and developed in Japan.

You mentioned modernizing some restaurants.

Since we have been in Japan for 43 years, we need to look at modernizing our restaurant environment from a long-term perspective. We will remodel some restaurants, and there will be some closures. We’re opening more Gold Standard Drive-Thrus.

How do you get feedback from consumers?

We do a number of customer research efforts, online surveys and face-to-face focus groups. We really want to put our customers first and we need to know what they want and where we are not meeting their needs. One of my favorite things to do and I did this when I first got here, was to go across the country talking to crew, managers, franchisees and customers. That’s the best way to get feedback about menus.

How did the sales tax hike impact your business?

The results were within what we predicted. We talked to a lot of customers beforehand and they said they wanted transparency in our pricing. We went to one-yen pricing, exactly 3% on most items, rather than in 5 or 10-yen increments. Customers said they really loved the 100-yen menu, so we decided to keep that. The tax went up but the tax-inclusive price stayed at 100 yen. And we lowered the price of the hamburger—which is iconic to consumers—to 100 yen and we’ve had tremendous response to that.

As you know, the fast-food industry is often criticized for not being “healthy.” What do you think?

There is no such thing as unhealthy food, just unhealthy eating habits. We make nutritional information available on our website and in our restaurants so people can make informed choices. If you take a look at a McDonald’s menu, we have a wide range of choices. The Happy Meal menu has over 100 choices available because moms can choose between hamburgers, cheeseburgers, chicken McNuggets and petit pancakes. They get to choose between French fries or a side of corn. Then they can have milk, vegetable juice, orange juice or soft drinks.

For adults, we have the Made for You system, which is a little different from what it used to be in the past. We don’t make your sandwich until you order it. You can order it without cheese, without sauce, get extra pickles … with some limitations; we make it the way you want it.

An important pillar for McDonald’s is to encourage an active lifestyle. McDonald’s sponsors one of the biggest kids’ baseball tournaments in Japan, as well as children’s soccer. Donald McDonald is out in the field in kindergartens teaching children exercises.

Do you see potential for growth in Japan?

Definitely. Out of the top 10 or 12 countries for McDonald’s, Japan is the most dense per population for IEO (informal eating out). There is huge potential here for us. The IEO value is 16.1 trillion yen. We have 3.1% of that.

How often do you eat McDonald’s food?

I joined McDonald’s because I love the food and I eat something from the menu almost every day, usually for lunch. I love Big Macs. When I’m out doing restaurant visits, meeting the crew and managers, they want me to try the food. I try and get out for an entire day visiting our restaurants at least once a week.

What areas of the business are you hands on?

My main role is to set the vision and work with the team on strategy. My second role is building a team to execute plans to deliver the strategy. So I prefer to be more hands on with setting the vision of where we want to go and what strategies we use to get there and then empower the team to carry that out.

Is McDonald’s a fun place to work?

It is a great place to work. We have 160,000 employees across Japan and we have strategies in place for hiring people and enabling them to become managers and franchisees. I think we are a respected employer because it is not just a job. We give people training that will help them no matter where they move on to, whether it is within McDonald’s or another career. For me personally, the most fun part of my job is going to the restaurants, meeting customers and crew and taking pictures with them.

How do you like to relax?

I try not to work on weekends but in this role, there is no such thing as a 9 to 6 job. Things come up. I love swimming and used to be a competitive swimmer. Tokyo is a great city for walking and my husband and I enjoy that. I like to read, too.

Japan Today

  • 2

    darnname

    I drive 30 minutes to get to the new Burger King where the service and burgers are great rather than two minutes to the pathetic place that used to be good.

    Oh, and I challenge anyone to find an email address or phone number for McDonald's so management can hear about problems. They aren't really interested in hearing about any problems, so there is no way to contact them via their website.

    "Boss, the customers are always complaining about our service. What should we do?" "Take down the phone number and don't give them an email address."

  • 0

    dcog9065

    I think Maccas is doing a fairly good job of defining itself and it's always held as the poster company for all fast food so it's always in a disadvantageous position. The McDelivery here is an absolute godsend.

  • 3

    Strangerland

    McDelivery is a joke - they require a minimum purchase of 1500 yen AND charge a delivery fee. It needs to be one or the other.

    Of course, the proof is in the pudding - people are using it, so obviously everyone doesn't feel the same as I do. But I'll never use it as long as they have both of these conditions.

  • 3

    M3M3M3

    I don't think anyone can ever complain about the service quality at McDonalds in Japan. The people who work there do a fantastic job in my opinion, even when the management tries to take away the menus.... @darnname, you had your chance to vent but you didn't even give us the substance of your complaint?

    The only aspect of McDonalds in Japan that I don't like is the excessive use of McDonalds App coupons. I've started to feel like a sucker whenever I pay full price for something, or I tend to avoid McDonalds altogether when I pop out for lunch without my phone.

    I understand that sales probably do go up when a coupon is released, but I think it can alienate alot of people and the returns are probably diminishing for McDonalds when every other fast food restaurant starts doing the same thing. I wonder if a slightly more generous customer loyalty reward point system would be more effective in the long term?

    @Strangerland: Regarding delivery, I imagine that there is a set delivery charge for 2 reasons. First, regardless of the amount you order it will always be fairly uneconomical to send someone to deliver your food, even if they filled that scooter completely (unlike a 3500yen pizza). Secondly, unlike a pizza delivery place, McDonalds probably has fairly limited delivery capacity at most locations. They don't want to be overwhelmed with delivery orders so they can't make it too attractive for the lazy among us. That's just my guess.

  • 1

    Jack Stern

    My only good comment about Mc D is that hey are exceptionally clean.

  • 8

    Mr. Noidall

    There is no such thing as unhealthy food, just unhealthy eating habits.

    What a clever way to put a spin on and deflect the question. Has she looked at the menu? A Big Mac alone has 550 calories and 29 grams of fat. If you eat just a Big Mac, you might be okay on calories, but you're already over what's generally recommended for daily fat intake. There's also the load of hormone drugs in the meat; not to mention the recent exposure of the contents of the McNuggets?

    Sure, it's up to the eater to determine individual eating habits. But don't give me this crock of McNuggets about how there's no such thing as unhealthy food.

  • 0

    Wakarimasen

    Not a fan of most fast food. Have a Mac maybe once a year. BK and Wendys maybe twice. KFC maybe 3 times. and then the occasional local one like Mos or Freshness...... Mac are ok - staff always very sweet. but prefer others.

  • 1

    lucabrasi

    We don’t make your sandwich until you order it. You can order it without cheese, without sauce, get extra pickles … with some limitations; we make it the way you want it.

    Sounds great.

    I'll have mine looking and tasting exactly like a Mos burger, please....

  • -3

    cleo

    For adults, we have the Made for You system

    Mikkie Deez has nothing Made for Me. Even the potatoes have beef in them.

    I wonder what comments Ms Casanova would like to make?

    http://www.mcdonaldscruelty.com

  • 0

    scoobydoo

    They do that. Contrary to what you think hamburgers are not McDs main business.

  • 3

    Ayukawa Datoc

    Yeah..they don't have phones where customers can call and emails to report their complaints... And when you ordered "Dekitate" they would mixed it with the old, it's not really fresh cook...and please!! Their customers not only Japanese but all other foreigners living here ..so get the real taste of Mc.Do as it is, don't mind changing it according to the taste of the Japanese people alone and we want volume. We need to use the magnifying glass to search for the bacon and all the all the other ingredients...their hamburger sucks! Not juicy , no taste at all ...they want healthy? Eat salad! Don't go to Mc.Do!!!

  • 1

    StormR

    The local drive thru should be renamed to McMystery bag coz I they never ever get the order right and have even said to them I'll take what ever you give me.

    They really struggle getting the order right, and I have told them often , but they still screw it up.

    And she is right there is now unhealthy food , ............................until eats eaten, food sitting on the server isn't unhealthy just sitting there is it.

  • 0

    Adriana Yamane

    Could you please introduce vegan burgers?

  • 3

    jerseyboy

    There is no such thing as unhealthy food, just unhealthy eating habits.

    What a clever way to put a spin on and deflect the question.

    Mr.Noidall -- agree. That is just a corporate PR response. (The McD version of the NRA's, "Guns don't kill people, people do".) Taken to its conclusion, and given, as you say the outrageously high fat content of many of McD's items, then eating at McD's defines "unhealthy eating habits".

  • -1

    bass4funk

    Of all you vegans out there, forget it! Especially in Japan, if you guys don't like it, don't go. Mickie D's is NOT going to start accomadating to the NON-meat eaters! You guys should go somewhere else that serves veggie burgers (for the life of me, I have no idea how anyone can eat that ) I don't know where, but I'm sure there are a few places in Japan. And to be honest, I'm not really a fan of the Golden Arches myself, especially in Japan where I think the burgers there are barely mediocre, I prefer Carl's Jr. www.carlsjr.com/menu/ over Mickie-D's any day of the week. They do have good fries though. Sorry, not trying to be mean to you vegans and vegetarians (my wife is one) Good lord, we always get into fights about meat and animals, I get it, they're cute and fuzzy, but also delicious. I don't know what Japan McD can do to make fantastic burgers, personally, I think they should introduce more skinless chicken sandwiches like in the states, those do taste great actually. I'm a chicken guy and my beef (pun intended) with McD or Japan burger shops in general, the lack of a good chicken sandwich, MINUS the skin!

  • 4

    Christopher Smith

    No wonder their profits have declined - people have finally seen the light and realised that McDonald's food is indeed, rubbish.

  • 3

    powderb

    "There is no such thing as unhealthy food," is absurd. Yes, there are unhealthy eating habits as she goes on to say, but there is most indeed "unhealthy" food." --- starting with her company, in fact.

  • 1

    AKBfan

    It seems that McD's continue to have a prace in the heart of the J public. Even if it is getting a wee bit smaller. Their food is pretty rubbish though.

  • 1

    rickyvee

    they need better nuggets. the all fillet ones you can get in the states are way better.

    and a good trick to get fresh french fries (if you have the time) is to order it without salt. then they have to cook a fresh batch for you.

  • 1

    Patricia Yarrow

    If you have to trick them into serving better food, perhaps it is best not to go there.

    And, puleez, "There is no such thing as unhealthy food, just unhealthy eating habits." PR spin at its spinningest.

  • 0

    Educator60

    "The Happy Meal menu has over 100 choices available because moms can choose between ..."

    Only eat there once every four years or so, therefore not that familiar with the menu. Is the Happy Meal the one for kids? Can it only be ordered by moms?!? Not dads or grandparents or aunts and uncles, siblings, etc?

  • 1

    yakimo

    mc donalds and the word food and nutrition together in one article .... this company will be in many law suits in the future. you ever did research what kind of food you stuffing in your mouth when eating the mc donald. why do americans are so obese and sick? shut that place down in japan. you just introduce western diseases in your country. by the way why are you drinking coke? this stuff got more acidity than a car battery. tons of salt in it to make you thirsty and than tons of sugar so you not taste the salt plus a few secret things which makes you an addict. wake up humans and educate yourself and not being brainwashed by the flashy add on tv and the nice clever made commercials. happy happy always at mc do? who goes there? people who looking for happiness.... think about it!

  • 4

    Serrano

    Ms. Casanova: "There is no such thing as unhealthy food, just unhealthy eating habits"

    Those unhealthy eating habits would be eating McD's food, no? There isn't much at McD's that is good for your body...

  • 0

    BertieWooster

    MacDonalds hamburgers - 100% beef.

    A sliver of minced up cow in a microwaved bun.

    Lovely!

    It is, as they say, all beef - what you get is the whole thing, from beef lips to beef tail, beef naughty bits, everything, including artificial beef flavouring.

    Enjoy!

  • 4

    GW

    There is no such thing as unhealthy food, just unhealthy eating habits

    If the majority of customers ever start to put health first then the golden arches etc will go bankrupt or severely downsize.

    The LAST thing the golden arches wants is for people to have healthy habits as it will bankrupt them, hence they are a large part of why the world gets fatter & fatter

  • 0

    jj1067

    sorry Mac you are history, I go to Mos Burger.

    but what I really miss is cinnabon.

  • 5

    Brian Wheway

    for what it cost here in the UK i would rather pay a little bit more and have a proper meal at a pub/resturant and feel full.

  • 1

    Bigbob

    I find most things at McDonald's very positive. One thing that does frustrate me though is that I am a hot coffee drinker and many times when I order a cup of coffee, I look at the pot they're pouring from and notice it is the last cup. Usually the coffee has been sitting there for a long time. Rather than throw it out and perk a fresh pot, they wait until the very end to serve a horrible/not fresh cup of coffee.

  • 0

    Serrano

    "It is, as they say, all beef - what you get is the whole thing, from beef lips to beef tail, beef naughty bits, everything, including artificial beef flavouring."

    Artificial beef flavoring in McD's hamburgers, eh? You sure about that Bertie?

  • 2

    Patricia Yarrow

    The epitome of junk food. Just do not go there. Even the cheap coffee is over at every conbini now.

  • 1

    Fadamor

    Oh, and I challenge anyone to find an email address or phone number for McDonald's so management can hear about problems. They aren't really interested in hearing about any problems, so there is no way to contact them via their website.

    Challenge Accepted!

    My Japanese is really horrible, but I believe this page has a way to submit comments/concerns:

    http://www.mcdonalds.co.jp/cservice/information/q_a/form/attention.html

  • 0

    M3M3M3

    Oh, and I challenge anyone to find an email address or phone number for McDonald's so management can hear about problems.

    The telephone number of the restaurant is also written on your receipt, so don't throw it away until your satisfied with your meal.

  • 0

    genjuro

    There is no such thing as unhealthy food, just unhealthy eating habits.

    What a clever way to put a spin on and deflect the question. Has she looked at the menu?

    Good point. And I'm curious to ask Ms. Casanova if she's reading this whether McD's uses GMO sourced ingredients in their offerings.

  • -3

    tmarie

    **Mickie D's is NOT going to start accomadating to the NON-meat eaters! **

    Yes they are. Guess you've never been to one in India. Lovely veggie McAloo burgers - I admit, I went and tried while there. Won't touch is anywhere else.

  • 1

    CGB Spender

    @Strangerland

    McDelivery is a joke - they require a minimum purchase of 1500 yen AND charge a delivery fee.

    Trust me, they mean it good with you! ... Because it makes you reconsider twice wether you want to order their awful food.

  • 0

    Suzu1

    The obsession of the McDonalds haters never ceases to amaze. Their observations about McDonalds suggest that they go there fairly often for people who supposedly hate the place. I find it to be exactly what it presents itself to be - a convenient, clean place to get an inexpensive meal or snack without any surprises.

  • 1

    Patrick Smith

    I find it to be exactly what it presents itself to be - a convenient, clean place to get an inexpensive meal or snack without any surprises.

    Exactly. We are all aware it's not the healthiest food in the world. It's fine for a snack or quick meal once in a while. I eat it maybe once every one to two months, and it is normally just an order of fries for a snack or when I need to get a quick lunch. It's not going to kill you eating a few times a year.

    No use ranting on and on about the nutrition. We don't go there expecting a healthy meal.

  • 0

    John Galt

    Mccrapburgers... If you want a GOOD burger, then make your way to Kua Aina. I wish A&W were in other parts of Japan. The only thing I like at McD is the hot apple pie and cheap vanilla ice cream from a combini.

  • 0

    Educator60

    I noticed Ms Casanova came in for a fair amount of criticism by Japanese media for being so slow to make an apology for the recent China-sourced meat scandal.

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