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McDonald’s to hike prices for first time since 2008

Bloomberg

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.

  • DBaxter

    CEO Harada sure knows how to drive away customers. He is running the company into the ground. Fire him before the stock price falls to nothing and customers abandon McD’s for good.

  • PX

    “Our pricing policy is demand-based and not cost-based, so it’s not because of increasing material prices,” he said.

    so he is saying that demand for burgers and chicken products are increasing but demand for fries are falling? i can believe the former but doubt the latter.

  • PX

    As long as they don’t raise the price of coffee. I don’t buy their products except the 100yen coffee.
    Of course, if Abenomics is to do as it promised, i would be getting a raise and wouldn’t have to worry about the price increases. Unfortunately, that is not the reality.

    • AP

      don’t worry. they will just sell you 20% more water.

    • YoDude12

      Abebnomics – let’s print a bunch of money to spur inflation, make our people pay more for goods and services so that we, the government, can collect additional tax revenue. We want to build a new Welfare Ministry golf course out in the burbs.

  • C321

    Update the restaurants and get rid of Ronald McDonald, the decor is stuck in the 80s. Make the menu healthier/higher quality. Introduce free wifi. Pay your staff properly. Reduce the price of sodas. Don`t hike your prices. You run a business with the customers you`ve got, not the customers you want….

  • C321

    At least they are honest about the fact they don`t give a damn about customers, they are just raising prices to increase profitability, it`s certainly a lot easier than improving your business or making customers like your products and services more.

    • Steve Hogan

      Your ignorance about economics is breathtaking.

      In case it has escaped your attention, the Japanese government continues to debase the Yen is a stupid attempt to spur exports. It must do so at the expense of driving up raw material costs for its businesses and with rising prices to its citizens.

      Since those prices have not met the government’s arbitrary inflation target of 2%, they are now promising to double the money supply in the next year. A more reckless and self-defeating policy is hard to imagine.

      If your economy has the same amount of stuff while the amount of currency doubles, prices can’t help but go up. This won’t be limited to cheeseburgers and Cokes. Everything the Japanese need to buy to survive is going to get more expensive.

      The sad news: this is precisely what every government in the developed world is pursuing. Pure insanity.

      • YoDude12

        ditto!

  • http://www.facebook.com/charles.f.sommers Charles F. Sommers

    Kick all the American imports out of Japan and return to the healthy foods that were available when I lived in Tokyo for the decade of the 1960s. Who needs a burger and fries when they can have a bowl of ramen that’s full of heart healthy veggies?

    • Chris Burke

      Healthy ramen fully of hearty veggies? Haven’t seen that since well, actually never. I agree with toning down the crap western diet part though.

      • http://www.facebook.com/charles.f.sommers Charles F. Sommers

        Here’s what it looks like Chris so you will know what to look for.

        http://www.personal.psu.edu/agl5095/blogs/la101h/japanese%20ramen.jpg

      • Chris Burke

        @facebook-1489584610:disqus Thank you for that. I guess I am still looking for great vegan ramen which is a tough to impossible find.

    • YoDude12

      …its about choice dude. You don’t like it, don’t eat it.

  • http://www.facebook.com/charles.f.sommers Charles F. Sommers

    I am saddened to see that the price of fries is coming down. Does this mean that all Japanese are doomed to end up looking like Kim Jong-un?

  • Mr. Shiroi

    I’m surprised this doesn’t have anything to do with the fact that the yen is becoming more inflated. And if it is part of the reason, it wasn’t in this article.

    Anyone care to chime in on that?

  • chomskyite

    Well lets see….yen goes from 77 to 99 / $ in six months. Thats 22% down. So Murderburgers raises 20%. Huurahh, we’re up 2%.