Wendy’s: Burger Wars Casualty
The American chain Wendy’s has stopped flipping hamburgers at all its 71 branches in Japan as of the end of December 2009, 29 years after it opened its first outlet in Tokyo’s Ginza shopping district.
The seventh largest hamburger chain in Japan had been operated by a franchisee, Zensho Co. Ltd., a Japanese fast food group controlling 3,900 outlets, including Sukiya and Coco’s. Though Wendy’s Japan generated 6.2 billion yen ($70 million) in sales in the fiscal year ending March 2008, it never gained an edge on its compatriot rival McDonald’s, which is said to control 65 percent of the market.
Wendy’s started serving in Japan in 1980 and was first operated by Daiei Supermarket. Zensho Co. Ltd. took over the chain in 2002 and December 2008 marked the end of their contract for the franchise. The group said it decided not to renew its contract in order to concentrate on its other retail businesses, especially gyudon (beef rice bowl) restaurants. Zensho’s sales for the year ending March 2008 were 310 billion yen.
Though the overall dining industry declined 0.8 percent in 2008, fast food chains have seen an increase in business due to consumers keen to eat out on the cheap. The fast food industry recently saw an overall 3.1 percent jump in Japan, though it was not enough to save Wendy’s, most of whose branches were in the Tokyo area. McDonald’s has succeeded through its reduced prices and special deals, such as offering hamburgers for as low as 100 yen, similar to its “one-dollar menu” in the States.
However, Atlanta-based Wendy’s, the third largest hamburger chain in America, has not ruled out a return to Japan. Andy Skehan, a senior vice president of Wendy’s international unit, said, “We intend to pursue new development opportunities in the country with new franchisees or joint venture partners.”
The firm recently found a new franchisee in Singapore, the Kopitiam Group, a firm that brought Wendy’s back to that country after an absence of ten years, with plans to open 35 branches over the next decade.
Though the Japanese hamburger market is dominated by McDonald’s and filled with local competition from the likes of Mos Burger and Freshness Burger, Wendy’s was still popular with many consumers. Indeed, the weeks after the closure was announced on December 10 saw branches packed with customers eager to get their last taste of the chain’s hamburgers. The Ginza store especially witnessed lines of customers extending to the sidewalk outside.
Wendy’s failure comes two years after another major American hamburger chain, Burger King Corp., returned to Japan following a six-year hiatus. Burger King also suffered from heavy competition with McDonald’s and temporarily left in 2001. It currently has 16 stores nationwide, compared with the 3,700 of McDonald’s.
Previous foreign food chains to bomb in Japan include UK sandwich shop Pret A Manger. Meanwhile, Krispy Kreme Doughnuts Japan, which has a significantly more luxurious brand image than its American counterpart, continues to grow, opening four more branches in 2009.
The absence of Wendy’s will likely be felt most strongly by Rakuten Eagles pitcher Kevin Hodges, who likes to eat a Wendy’s chicken sandwich before a game for good luck.
Prime Minister 2.0: Hatoyama Tweets
Prime Minister Yukio Hatoyama has gone online. As of January 1, 2010, the DPJ leader has been regularly tweeting from his official Twitter account and has also launched a new blog. The first two posts on the latter were a picture of his residence with a New Year’s Greeting, and a picture and report from his recent trip to India, where he visited Gandhi’s grave with his wife.
The move is in some ways a surprisingly modern and American-style approach to politics. Communicating directly online with the public through social media became a political phenomenon of the 2008 U.S. Presidential election, and was a significant factor in connecting young voters to Barack Obama’s campaign. So far it seems to be succeeding. As of this writing, Hatoyama had over 120,000 “followers” on Twitter, all receiving his daily short messages.
It is also a surprising tactic given the usual conservatism of mainstream Japanese society with regards to social media. Many local observers still remember that as recently as 2007 legislator Kan Suzuki was reprimanded for opening a cyber office in the virtual community Second Life during an election campaign, a period during which the updating of campaign web pages is prohibited.
Twitter began as an American service, but has now expanded its popularity around the world, with Japan as its second largest user base. However, its creators recognise the unique potential of Japan as its first–and so far only–foreign language version of the service.
One thing is certainly clear: Hatoyama and his advisers are taking social media seriously, employing famous designer Yuji Tokuda to produce the blog layout. Hoping to perhaps emulate the charisma and direct appeal of President Obama, Hatoyama’s blog is colorful and fun, with a pigeon mascot as its logo, a play on the Japanese word “hato,” or pigeon, of the same name.
