Chocolate fries: sweet saviour or last gamble for McDonald's Japan?

McDonald's in Japan is offering chocolate fries in a bid to battle slumping sales and dwindling market share in the country. Yuriko Nakao/Bloomberg

Tokyo // Customers like Shigeaki Yamaguchi may be the last hope for McDonald’s Japan as it battles slumping sales after an embarrassing string of food scandals.

At a location in Tokyo’s busy Shinjuku district, Yamaguchi munched on the chain’s newest culinary offering — french fries drizzled in brown and white chocolate syrup.

“Delicious,” the 37-year-old proclaimed as he dug into the sticky ¥330 yen (Dh10.60) mass known as the McChoco Potato.

“The reason I came is that I wanted to taste products that didn’t exist until now.”

Love them or hate them, social media spun into a frenzy over chocolate fries, and customer numbers rose in January for the first time in several years.

“The chocolate fries have been extremely popular with customers, and actually not just customers in Japan,” the unit’s president Sarah Casanova said last week.

“They have made the news and blogs and SNS [social networking services] all over the world.”

Still, food industry watchers warn it will take more than the apparent success of chocolate fries to save the fast-food chain.

Sales went into a steep dive after a mainland Chinese supplier was discovered to be mixing out-of-date meat with fresh produce. Then bits of plastic were found in a sundae and pieces of vinyl in chicken nuggets.

The apparent discovery of a human tooth in a box of french fries was, for many consumers, the icing on an increasingly unappetising cake.

Vows to improve food quality and win back “customer trust” followed.

Market share in Japan slipped to 10.4 per cent in 2014 from nearly 14 per cent five years earlier, according to market research firm Euromonitor.

McDonald’s Japan last week reported an annual loss of 34.7 billion yen ($304 million), its second straight year in the red and the biggest shortfall since opening the first store in Japan 1971.

“Undoubtedly, 2015 was the most challenging year we have faced in our 45-year history,” Ms Casanova said.

US-based McDonald’s is mulling the sale of some if its stake in the Japan unit, which has closed hundreds of its 3,000 locations and renovated others in recent years.

A new mix-and-match menu with burgers, side dishes and desserts has also been in the offing as well as a focus on local produce, such as using cheese from northern Hokkaido or sweet potatoes from southwestern Japan.

The company held a burger-naming contest this month, garnering some five million suggestions on what to call its new sandwich.

The lucky winner gets ¥1.42 million yen in cash – enough, McDonald’s says, to buy the yet-to-be-named burger every day for a decade.

Still, sceptics remain. “I’ll always have doubts after the scandal,” said Yosuke Ota, who works in advertising.

Food industry analysts are also sceptical.

“Some of the company’s efforts, such as store renovations and a new menu worked out, but the rising customer numbers are mostly due to reversing a sharp drop a year ago,” said Yuri Gorai, a research analyst at Euromonitor.

“Monthly sales are not back to the same level as they were before the food scandals.”

Japanese customers expect high quality food, so the chain must re-focus on sourcing locally, said Seiichiro Samejima, a fast food sector analyst at Ichiyoshi Research Institute.

* Agence France-Presse