McDonald’s Corp. (MCD:US)’s Japan business will raise some prices by much as 25 percent next month, the fast food chain’s first increase on burgers in the country since 2008.
Hamburger prices will go up to 120 yen from 100 yen and cheeseburgers will rise to to 150 yen from 120 yen in Japan in May, McDonald’s Holdings Co. Japan Ltd. said in a statement today. The hikes are part of the company’s plan to boost profitability, it said.
McDonald’s is raising the prices after the Japanese unit reported a 12 percent drop in operating profit last year. Fewer discounts drove March same-store sales 3.6 percent lower at the local business, the 12th consecutive monthly decline.
The restaurant chain is also raising the price of small shakes to 120 yen from 100 yen, and some chicken to 120 yen from 100 yen. The price of small fries will come down to 150 yen from a previous range of 190 yen to 230 yen.
The fast food chain has been testing the price change in the Fukuoka region since January, and “judged the new pricing took the balance between the customer satisfaction and our profitability,” said spokesman Kenji Kaniya via phone.
“Our pricing policy is demand-based and not cost-based, so it’s not because of increasing material price,” he said.
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