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15/04/02 . By Kanji Ishibashi . Dow Jones Business News . Tokyo
McDonald's Japan To Drastically Cut Shop Openings This Year
McDonald's Co . (Japan) Ltd. will significantly reduce store openings this year, as a result of large-scale reorganizations occurring in the Japanese retail sector, a company spokesman said Tuesday.
Ongoing industry realignments, restructuring and corporate failures in the retail sector have resulted in the closure of many supermarket stores and shopping centers, where McDonald's stores are often located.
"Considering the current unstable situation in many business areas, we judge it better to beef up our existing store operations than to open stores aggressively," the spokesman said.
The move signals a shift in the company's aggressive store opening business strategy since its establishment in 1971.
The Tokyo -based unit of McDonald's Corp. (MCD) of the U.S. plans to open 220 new shops in Japan this year, compared with 285 openings last year and about 400 to 500 openings in the prior few years. The company will see a net increase of 90 stores in 2002, less than half the 224 marked in 2001, the company said.
McDonald's said it will focus more on measures to revitalize sales at its existing shops which suffered following the outbreak of mad cow disease in Japan last year, including via renovations and area-specific marketing.
The company aims to lift the number of McDonald's chain shops in Japan to 10, 000 by 2020. The company had 3,822 restaurants as of the end of last year.
At midday Tuesday on the Jasdaq over-the-counter market, McDonald's shares were up
0.4% at Y2,860, while the benchmark Nikkei 225 Stock Average was 1.0% higher.