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McDonald’s Japan and Regional Pricing

June 12, 2007
By Ken Worsley


This one may not see like a big deal, and it sure seem easy to miss, but it is important: McDonald’s Japan To Adopt Region-Based Pricing

According to the article, the fast food giant intends to raise prices in Tokyo by 3-5% and lower prices in the countryside by 2-3% on average. Facing a growing disparity between rent and labor costs in the city and the countryside, McDonald’s is saying that it is being forced to make this move.

Anyone who lives in Japan knows there’s almost no such thing as regional pricing, and has probably wondered why.

We have to believe that McDonald’s did not want to raise prices anywhere at this time, but that there are signs of inflationary pressure, especially in the real estate market, as recent data on office rent shows.

The guy below wants to see how many seconds it takes to eat a Mega-Mac. It doesn’t really matter; just trying this game means McDonald’s wins.

Filed Under Econ Light, Japan, Retail 

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Comments

5 Responses to “McDonald’s Japan and Regional Pricing”

  1. McDonald’s To Adopt Regional Pricing In Japan » Japan Probe on June 12th, 2007 4:50 pm

    […] From Japan Economy News: The fast food giant intends to raise prices in Tokyo by 3-5% and lower prices in the countryside by 2-3% on average. Facing a growing disparity between rent and labor costs in the city and the countryside, McDonald’s is saying that it is being forced to make this move. […]

  2. Liberal Japan » Blog Archive » Kininaru and O-kiniiri News on June 13th, 2007 6:37 am

    […] McDonald’s Japan to raise menu prices in Tokyo, Osaka, lower prices in Tohoku, Mainichi Shimbun; Japan Economy News and Japan Probe both discuss this story. Check out the map at Japan Probe to see if your area is affected. Asahi story is here. […]

  3. Garrett on June 14th, 2007 9:57 pm

    Kobayashi that guy is not. He lost a long time before timing himself eating a Mega MAc.

    Do you think this small price increase is going to help Burger King establish itself at all?

  4. Ken Worsley on June 14th, 2007 10:25 pm

    Garrett, It sure can’t hurt Burger King (or anyone else for that matter) if McDonald’s raises prices in the cities.

    But will it help BK directly? Not right now. I think the people going to BK are going to their one and only shop because 1) They like BK and missed it, 2) They’re curious, or 3) It’s convenient.

    If BK was challenging MD directly, it would be a factor, but since I don’t think prices are a factor in BK’s nascent customer core in Japan, I don’t see them gaining much benefit in the short term from a small price hike at McDonald’s.

    It also does not seem as though BK is going to focus their marketing attention on prices. They’re not looking to be the cheapest or win on prices. I think they will focus on taste and brand experience - the two things they failed to take advantage of last time around.

  5. Ken Worsley on June 15th, 2007 11:02 am

    Garrett, I don’t trust anything on this website, but have you seen this:

    http://www.japantoday.com/jp/popvox/736

    I still say it hurts McDonald’s without benefiting BK directly yet.

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