Fast Food Chains Crowd into Japanese Market
By Jasper Tolsma
SNA (Tokyo) — Foreign fast food and casual dining companies are ready to take a bite out of Japan’s food market, in spite of the country’s hampering tax hikes and reports about the struggles of major players like McDonald’s.
In quick succession at the start of this year, a string of overseas companies, mainly American, announced that they would enter the Japanese market. Amongst them are the American-based Mexican fast food chain Taco Bell, burger chain Shake Shack, and the pizza chain 800 Degrees Neapolitan.
Because they are relatively small players in their domestic markets as well–although Taco Bell operates more than 6000 stores worldwide–most of the new chains will start out with only one restaurant, often in cooperation with local companies.
Shake Shack plans on opening its first restaurant in Japan in 2016 in close cooperation with Sazaby League, the company that manages other chains like Afternoon Tea and Kihachi.
Taco Bell tried entering the Japanese market before in the 1980s, shut down operations in the following year, except for some outlets on US military bases.
Not only fast food restaurants are opening up new restaurants in Japan. American donut chain Blue Star Donuts has recently opened up its first store in Japan as well, under the name Camden’s Blue Star Donuts.
It remains to be seen if the new restaurants will suit the appetite of the Japanese people and turn over a profit. The Japanese food market is oversaturated with convenience stores, accounting for a large proportion of the fast food market, and popular Japanese chains Like Mos Burger and Pronto already cater to the Japanese taste for foreign cuisine.
The economy is a worry as well. Although data from the Japan Food Service Association shows that consumer spending per meal is up by 2.7%, the number of consumers and the total amount of Western-style fast food sold is showing a declining trend.
One chain that has set a bad example in recent years is the giant among fast food chains: McDonald’s. Food safety scandals involving bad meat, unhappy franchisers, and poor public communication saw the American company’s profits diminish. They recently published a net loss of about $38 million dollars and a 29.3% decline in sales in March, their 14th month in a row of slipping sales. The troubled company announced that they will close 131 restaurants throughout Japan and cut executive salaries for a six month period.
It remains to be seen if the troubles at McDonald’s will open up a niche for the new American fast food chains, or if they will suffer similar difficulties as the venerable fast food brand.
Jasper Tolsma is a contributing writer to the Shingetsu News Agency.