McDonald's Japan ends burger discount


McDonald's Japan is moving to end discount burger prices as it struggles with a weakening yen

TOKYO, Japan -- After two years of selling burgers at a half-price discount, McDonald's Japan has decided to end its weekday discount campaign.

Beginning February 14, McDonald's will sell its regular hamburger for 80 yen all the time from a current weekday price of 65 yen and 130 yen during weekends and holidays.

Cheeseburger prices will also rise from 80 yen to 120 yen, while the price of a Filet 'o Fish sandwich will rise from 120 yen to 190 yen.

But the company says it will still offer lower prices for its Big Mac hamburgers and some combination meals, while trying to market new combination platters.

McDonald's Co, Japan's biggest restaurant operator with about 60 percent of the domestic hamburger market, slashed its hamburger price from 210 yen to 130 yen in 1995 when the yen appreciated sharply.

Weekday campaign started in 2000

The company started its weekday half-price campaign in February 2000.

But while the measures lifted sales sharply, the company has been forced to end the discount strategy.

It is no longer proving effective in drawing consumers, who have become accustomed to the lower prices.

McDonald's is also hurting from a rise in prices of materials due to a weakening yen. McDonald's Japan imports all its beef from Australia.

McDonald's Japan Chief Executive Den Fujita admitted in December that maintaining the low prices would be difficult due to the yen's weakness.

The yen traded at about 132.8 against the greenback in Tokyo late Wednesday. The Japanese currency has fallen about 10 percent in value against the dollar over the past two months.

First to go public

McDonald's Japan, which listed in July last year, is the first McDonald's unit to go public. It opened its first restaurant in Tokyo's Ginza district in July 1971 and now has 3785 outlets nationwide.

Shares in McDonald's closed 20 yen or 0.69 percent lower at 2890 yen on Wednesday.

McDonald's shares have fallen 21 percent since it went public on the Jasdaq market last July, on concerns about the company's earnings after Japan reported its first case of mad cow disease.

The mad cow scare, which hit Japan in September, has seen McDonald's existing-store sales slump in October 2001 by 17.6 percent from a year earlier.