McDonald's Corp.'s Japanese business will raise some burger prices by much as 25 percent next month, the fast food chain's first increase in the country since 2008.
Hamburger prices will go up to ¥120 from ¥100 and cheeseburgers will rise to ¥150 from ¥120 in Japan in May, McDonald's Holdings Co. Japan Ltd. said in a statement Thursday. The hikes are part of the company's plan to boost profitability rather than a rise in materials prices, it said.
McDonald's chose to raise prices after the Japanese unit reported a 12 percent drop in operating profit last year. Fewer discounts drove March same-store sales 3.6 percent lower for the 12th consecutive monthly decline.
The restaurant chain is also raising the price of a small shake to ¥120 from ¥100, and some chicken products to ¥120 from ¥100. The price of a small order of fries will come down to ¥150 from the previous range of ¥190 to ¥230.
The fast food chain has been testing the price changes in the Fukuoka region since January, and "judged the new pricing took the balance between the customer satisfaction and our profitability," said spokesman Kenji Kaniya via phone.
"Our pricing policy is demand-based and not cost-based, so it's not because of increasing material prices," he said.
