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DoCoMo led all mobile carriers in July new subscribers

As an update to last week’s article on quarterly losses at NTT, it was announced Friday that out of Japan’s mobile service providers, NTT DoCoMo gained the most new subscribers in July.

Prior to July, Softbank had gained the most new subscribers for 26 consecutive months. It had been 35 months since DoCoMo led a single month in subscription gains. DoCoMo added 143,600 users in July to reach 55 million subscribers, while Softbank added 137,600 users to reach 21.1 million in total. AU added 56,600 new users and now has 31 million subscribers.

Apple’s iPhone, carried by Softbank, was the second most popular handset sold in July, while Sharp’s Aquos Shot, a DoCoMo offering, saw the highest sales.

Does this signal the end of Softbank’s reign at the top? DoCoMo has slashed data transfer fees, and it may prove more difficult for Softbank to follow suit. Back in April, DoCoMo announced that the cut in data fees would reduce its operating profit by about 40 billion yen. Still, it remains to be seen how long DoCoMo can stay in the top spot, or how much it might cost the company to gain market share percentage points.

McDonald’s Japan to surpass 500 billion yen in sales for first time in 2008

Just a few years ago, things were looking grim for McDonald’s Japan. A nasty price war back in 2000 helped lead to the departure of Burger King from the Japanese market (though Burger King has been resurrected), but took its toll on McDonald’s ability to profit heavily from economies of scale.

The tables have turned. Yesterday, McDonald’s Japan announced that it expects sales at its 3,754 Japan locations to top 500 billion yen for the first time ever in 2008. This would make 2008 the fifth consecutive year in which McDonald’s sales have risen. November sales were reported to have been 14.4% higher than a year ago. Read more

Some firms following McDonald’s Japan in paying overtime to shop managers

Back on May 24, we wondered if the Tokyo District Court’s decision to order McDonald’s to pay out just over 7.5 million yen in back overtime pay to its shop managers would lead to a trend throughout the services industry. It seems as though one is evolving. A couple of weeks ago, the Nikkei reported that convenience store giant Seven Eleven has begun paying overtime to 500 managers at stores that it operates directly, while menswear outlets Yofuku Aoyama and Aoki are both paying overtime to shop managers as of May 2008.

According to the Nikkei, however, restaurant managers in general will still have it tough. 68% of firms polled said they intend to continue classifying their shop managers as company management, which means they will be exempt from having to pay them overtime.

What effect might all this have on profits? A year’s worth of overtime for shop managers at Yofuku Aoyama is estimated to set the firm back 600 million yen.

Toyota, McDonalds to pay for overtime work: Will a trend develop?

Back in January, McDonald’s Japan was ordered by the Tokyo District Court to pay just over 7.5 million yen in overtime pay to a store manager. McDonald’s had argued that store managers were not entitled to overtime pay, as they were in managerial positions. Not surprisingly, the court rejected such a notion in its decision.

The case seems to have made McDonald’s worried about its PR more so than legal issues, as the firm announced earlier this week that it will begin paying overtime to its store managers. At the same time, Toyota has announced that it will begin paying for ‘voluntary’ overtime conducted during off-hours kaizen sessions.

Will such moves give these firms - especially McDonald’s - a leg up on the competition in terms of attractiveness as employers? Will we see a bump in average wages? Will other companies begin to announce that they will pay overtime in order to improve their PR messages? Imagine: “Work here! We’ll even pay you for it!”

Although it remains to be seen if announcing that a firm will pay for overtime work will catch on as a trend, it seems safe to bet that we haven’t heard the last of this.

Japan’s consumer confidence at four year low in November

Yesterday, the Cabinet Office released the results of its consumer confidence survey for November, and the results were not pretty. Last month, we noted that consumer confidence was at three year lows and was coming dangerously close to being in the “30s.” That happened in November.

The overall consumer confidence index itself fell 3 points to 39.8, the lowest score seen since December 2003. The score for “Overall Livelihood” fell 4 points to 37, for its lowest score since March 2003.

The consumer confidence index registers a score that is considered even at 50. A score above 50 indicates that optimists outnumber pessimists. The survey has not hit the 50 point level since April 2006, and has not been above the 50 point level since the second quarter of 1990, when it was at 50.3. Read more

Discount education simply does not work; neither does blind trust in food makers

I just read an editorial/article on Nova that struck me as so-so at best, but one quote really stands out, and tells the story in six simple words:

“Discount education simply does not work.”

Let’s see how that gets applied to the food industry in the coming weeks and months. From a different article on problems with safety in Japan’s food industry:

“I was always wary of Chinese products but now I feel I can’t trust anybody, especially after Arafuku.” - Tokyo housewife Naoko Shimoda

So…Snow Brand, Nippon Ham, Meat Hope, Fujiya, Ichiya, Shiroi Koibito, Hinaidori, and McDonalds Japan (which managed to keep its 2002 food scandal very quiet) didn’t bother you? It took problems at Akafuku to make you realize something is going on?

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.

Mega Mac Indeed: McDonalds Japan Smashes Sales Records

Just a few years after things had been looking very bleak for them, McDonald’s Japan is on fire. On Monday, the company announced that they had reached their goal of having 1,000 of its 3,828 shops operating 24 hours.

That was something, but better news followed: over the last fiscal year, McDonald’s Japan broke its records for daily, monthly and yearly sales. In its record-breaking month of March, the company’s monthly sales hit 43.05 billion yen.

Many are attributing high sales to the Mega Mac, its re-introduction to the market, and other seasonal sales items. Anecdotal evidence: At my station, a large new McDonald’s shop opened a few months ago. At lunchtime, lines spill out into the street. A brand new Matsuya opened a few doors down, and it’s very crowded as well, though mostly with guys eating alone. Maccers seems to be a big hit with the young moms.

Last week, McDonald’s reported that its global sales had risen 8.2% in March.

Lest it go unnoticed: About a month ago, McDonald’s Vice President for People Dave Fairhurst said:

It’s time the dictionary definition of ‘McJob’ changed to reflect a job that is stimulating, rewarding and offers genuine opportunities for career progression and skills that last a lifetime.

Fat chance. At least they didn’t call it a McComment on a McPress Release.

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