Fast-food chains in Japan are launching the biggest expansion wave in decades and adopting strategies that would have been unthinkable in the early 2000s, when hamburgers were a prime symbol of deflation.
McDonald’s Holdings (Japan), the biggest player, is emerging from a prolonged slump and on Tuesday announced it is planning the first net store increase in a decade this year. Burger King, the world’s second-largest hamburger chain, aims to triple its Japanese locations to 300 by 2022, spending 5 billion yen ($45.5 million) in the process.
McDonald’s saw a 4.5-fold increase in group net profit for the fiscal year through December, logging a record 24 billion yen. It aims to open 150 to 200 new locations in the next three years. Factoring in closings, it expects a net increase of around 100.
“Over the last several years, we were focusing on optimizing our existing store portfolio,” President Sarah Casanova told reporters. “Now, it’s time to look to opportunities to grow with new restaurants.”
The number of McDonald’s locations in Japan peaked in 2002 and has been decreasing since. The chain now has 2,900 restaurants after a net decrease of about 1,000.
Opening new restaurants might seem like an odd move in a country where the birthrate is falling and consumers are holding back on dining out. The hamburger business, however, is one of the few bright spots in an otherwise bleak restaurant industry.
It helps that chains like Burger King and McDonald’s are globally recognized. Japan is welcoming record numbers of tourists — 28.6 million last year — giving the restaurants a steady stream of fresh customers looking for familiar flavors in an unfamiliar land.
Burger King Japan, the U.S. chain’s local operation, will open most of its 200 new restaurants in large cities like Tokyo, Osaka and Nagoya. Target locations include shopping center food courts and suburban spots with room for drive-thrus. Open-kitchen interiors will allow customers to see their Whoppers being cooked.
Burger King also intends to offer a home delivery service, countering McDonald’s Japan’s move to expand deliveries in partnership with Uber Eats last year.
This is Burger King’s second crack at the Japanese market. The chain left the country in 2001, after a slump. It returned in 2007 with support from such companies as Lotte, but its store count remains far behind McDonald’s Japan’s 2,900.