June 24, 2018
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Wendy’s offers $16 foie gras burger in Japan

By Cheng Herng Shinn, Bloomberg News

TOKYO — Wendy’s Co. is adding goose-liver pate and truffles to burgers as it invests as much as $200 million on a return to Japan two years after leaving the country.

The Japan Premium sandwich sells for 1,280 yen ($16) at Wendy’s in Tokyo’s Omotesando luxury shopping district, the first of 100 targeted shops. “We think the fast-food market here is ready for something different,” Ernest Higa, chief executive officer of Wendy’s Japan, said in an interview at the restaurant’s opening Tuesday.

The third-biggest U.S. fast-food chain is returning to Japan under a plan to expand outside the U.S., where it got 92 percent of revenue in 2010, after posting losses in six of the past eight quarters. The Dublin, Ohio-based chain first is focusing on the world’s second-biggest fast-food market as it looks for operating partners in China and Brazil.

“Japan is the most important of the three to me, because we are actually selling burgers here today,” Darrell Van Ligten, international division president, said in an interview in Omotesando. The company expects to eventually expand to about 700 restaurants in Japan, compared with about 3,300 for McDonald’s Corp.’s local unit, the nation’s biggest fast-food burger chain.

Wendy’s ended a 30-year run in Japan in 2009 after its partner Zensho Holdings Co. declined to renew the agreement, saying it would focus on building its main Sukiya chain of beef-bowl restaurants.

“Our partner had a pretty significant business which was their primary focus,” Van Ligten said. “Given the size of the different businesses, Wendy’s wasn’t as much of a focus area as we would have liked it to be.”

In coming back to Japan, the burger chain is counting on its premium menu to lure customers in a “very, very competitive” environment, Higa said.

“This is an aging society which has more single people who just want a meal fast, but restaurants are too expensive so fast food is the correct sector to be in,” said Kyoichiro Shigemura, a Tokyo-based senior analyst at Nomura Holdings.

Wendy’s menu pits it against Japanese rivals including Mos Food Services Inc.’s Mos Burger and Lotteria Co., which has a 1,800 yen ($23) Matsuzaka beef burger, for premium items, Shigemura said. “The competition is really stiff,” he said.

Wendy’s Japan is a joint venture between Wendy’s Co., which owns 49 percent, and closely held Higa Industries Co., with 51 percent.

Wendy’s intends to triple the number of restaurants outside the U.S. to about 1,000, CEO Emil Brolick said on a conference call last month, without giving a time frame.

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