‘Chocolate fries’ come to McDonald’s Japan rescue

Bloomberg

McDonald’s Japan took a series of hits starting in 2014 that threatened to crack its Golden Arches: a supplier was selling expired chicken, a human tooth was found in french fries and a child was injured by a plastic shard inside
a sundae.
Sales plummeted to their lowest since the company went public in 2001, and the chain closed hundreds of restaurants. McDonald’s Corp. in the US said it was considering selling its 49.9 percent stake in the Japanese company as losses piled up.
“I remember thinking at that time: ‘McDonald’s is over,”’ said Ichiro Fujita, a Torrance, California-based consultant who helps bring foreign restaurant brands to Japan. “A lot of people even said they might need to change the name because the image was so bad.”
Yet Chief Executive Officer Sarah Casanova decided to counterpunch. A company lifer who took over McDonald’s Holdings Co. Japan in 2014 with little command of Japanese, Casanova visited all of the country’s 47 prefectures to assure diners—especially mothers —that her company was implementing safeguards, and to ask them what they wanted from McDonald’s.
“It made us go out and listen to customers,” Casanova, 52, said of the crisis. “We were
not doing a great job of giving them what
they wanted.”
Armed with their feedback, Casanova revamped the menu to add local flavors like the “Yakki Burger” and items like chocolate-covered fries. She gave many outlets a facelift and forged a partnership featuring Pokemon characters. She cut off the troubled Chinese chicken supplier and introduced measures so parents could trace where their children’s meals were coming from.
Since then, the shine has returned to the arches. Meanwhile, same-store sales climbed for the 21st consecutive month in August, and the company raised its full-year profit outlook twice. For the first time since 2012, it’s opening more stores in Japan than it’s closing during a six-month period.
“They focused on the foundations—renewing stores, changing its menu and listening
to the voices of moms,” said Seiichiro Samejima, a Tokyo-based analyst at Ichiyoshi
Research Institute.