French fry shortages and food scandals take a big bite out of McDonald’s Japan

One tofu McNugget, please.
One tofu McNugget, please.
Image: Reuters/Issei Kato
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McDonald’s in Japan is expecting another bad year. The 49%-owned subsidiary of the American fast food giant expects an operating loss of ¥25 billion ($210 million) in 2015, more than triple its losses last year. The company also expects sales to fall 10% in what will be the seventh consecutive year of declines.

The company has not been able to catch a break, falling prey to a worldwide french fry shortage and a series of food scandals. McDonald’s Japan discovered in July that its Chinese supplier, Shanghai Husi Foods, had allegedly sold expired meat to its customers. A month, later a customer in Osaka found a human tooth in a serving of fries.

But McDonald’s problems in Japan go back even further. Franchise owners are unhappy, more Japanese are choosing street stalls over the classic fast food chains, and convenience stores are competing against McDonald’s with ready-made meals and cheap coffee.

In hopes of making a profit again in 2016, the company will close about 131 outlets and renovate another 2,000. It also plans to cut about 100 jobs at its headquarters in Tokyo. As for the food, the chain has pledged stop importing chicken from China, and it has rolled out a faux chicken nugget made from tofu: the “Tofu Shinjo Nugget.”