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Burger King Brings the Whopper Back to Japan

From The New York Times, September 23, 1993:

The Burger King Corporation, the world’s No. 2 hamburger chain, has entered the Japanese burger market — 22 years after the McDonald’s Corporation. Burger King has joined in a 50-50 venture with the Seibu Railway Company, a major private railway company and real estate developer, to bring the flame-broiled burger to Japan.

We all know how that turned out: After operating shops in Japan from 1996 to 2001, Burger King was forced to pull out of the Japanese market as a result of losing in a price war to McDonald’s.

As of yesterday, Burger King has officially returned to Japan, having opened their first new shop in Shinjuku, strategically (or symbolically) located near to the McDonald’s Japan headquarters. Most significantly, perhaps, Burger King returns to Japan with an entirely new management team. This time, Burger King is being run as a joint venture between Lotte (which owns the Lotteria chain of hamburger shops) and Revamp, the management consulting firm responsible for bringing Krispy Kreme to Japan. A second shop is slated to open in Ikebukuro on June 22.

This time around, Burger King Japan is betting on the recent trend in large-sized fast food portions to bolster its sales in Japan. In reflection of that trend, Burger King has priced its Whopper and Whopper with cheese at 20 yen more than last time.

Will this result in another Burger War? McDonald’s, which was nearly driven to the point of bankruptcy a few years ago due to slashing prices, just experienced a huge financial turnaround in fiscal 2006; Over that period, McDonald’s Japan broke its records for daily, monthly and yearly sales. In its record-breaking month of March 2007, the company’s monthly sales hit 43.05 billion yen.

Does McDonald’s Japan have the stomach for another price war, so soon after getting back on track financially? Surely they don’t want such a thing, but it seems likely that having been through it once, they could do it again. Do they face better competition this time? Undoubtedly. Japan Tobacco and Seibu seemed like an unlikely couple to run point on marketing a fast food franchise, and it didn’t take them long to fail at all. Lotte, on the other hand, has been operating shops in the Japanese market for years, and knows what they are doing. Revamp got things right with Krispy Kreme, so they might have the magic buzz marketing touch. Their location (Shinjuku’s Island Tower) might not be as good as Krispy Kreme’s, but their position might just be strong enough.

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