McDonald's Japan struggles continue

by Erica Shaffer
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McDonald's Japan restaurant in a city
Same-store sales plunged 23.4 percent in June.

TOKYO – Japanese consumers aren’t responding to the love from McDonald’s Japan. The unit of Oak Brook, Ill.-based McDonald’s Corp. reported a same-store sales slide of 23.4 percent in June.

In its monthly sales report, McDonald’s Holdings Japan reported sales at all stores retreated 23.5 percent, up from 22.3 percent in May. Spending per customer declined by 14.5 percent. The weak monthly results show McDonald’s Japan continues to struggle to regain consumers’ trust after a series of food safety problems, including foreign matter in McDonald’s food.

McDonald’s CEO Steve Easterbrook cautioned investors in April that the company expected McDonald’s Japan to post a huge loss for fiscal 2015 as the unit implements McDonald’s revitalization plan. Initiatives include remodeling existing stores.

“Presently, only 25 percent of our restaurants fit our vision of a Modern Burger Restaurant; we plan to remodel approximately 2,000 restaurants aiming to have 90 percent of our restaurants upgraded to modern within four years,” the company said in April. “In 2015, we are targeting to remodel approximately 500 restaurants located in food courts or shopping malls.”

The company also announced plans to close 131 underperforming restaurants this year, but there are speculations that continued declines same-store sales could lead to more restaurant closures. McDonald’s Japan operates 3,100 locations in Japan.

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