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Food & Beverage

McDonald's Japan's celebrated CEO passes baton to deputy

Tamotsu Hiiro, recruited by Canadian Sarah Casanova, has big shoes to fill

A McDonald's in the Center Gai shopping district of Tokyo's Shibuya Ward. (Photo by Makoto Okada)

TOKYO -- McDonald's Holdings Japan will replace longtime chief Sarah Casanova, credited with lifting struggling operations to a record profit, with her hand-picked deputy next month, entrusting him to achieve further growth as the pandemic alters consumer habits.

Director Tamotsu Hiiro, 55, will take over as president and CEO on March 26, the company announced Friday. Casanova, 55, will become chairwoman.

Hiiro, who succeeded Casanova as president of unit McDonald's Japan in 2019, has been assisting her in pushing a mobile ordering app and expanding home delivery.

Casanova, a Canadian, became president of McDonald's Holdings Japan in March 2014 after a seven-month stint as president of McDonald's Japan.

She faced challenges from the get-go. Reports that McDonald's had been using chicken from a Chinese supplier accused of shipping expired products sent sales plunging. Even her demeanor in news conferences drew criticism as "distant." The company reported two consecutive years of net losses in 2014 and 2015.

Tamotsu Hiiro, named as the next CEO of McDonald's Holdings Japan, speaks at a news conference. (Photo courtesy of the company)

But Casanova would not give up. To rebuild public trust, she promoted store upgrades and introduced an app to accept customer input at each location. A special nighttime menu helped broaden the customer base. As families returned to the Golden Arches, existing-store sales grew on the year for 51 consecutive months through February 2020, before the coronavirus began to take a toll.

Still, sales rose 2% for 2020, with operating profit rising 12% to a record high of 31.2 billion yen.

Despite her superb record as a manager, Casanova struggled to groom a successor in-house. She recruited Hiiro from Johnson & Johnson here and put him in charge of McDonald's Japan in 2019, giving him two years to prepare for replacing her.

Sarah Casanova, the outgoing CEO of McDonald's Holdings Japan, will become chairwoman. (Photo by Kento Awashima)

Until now, simply following Casanova's business model guaranteed strong earnings. The record operating profit last year is credited to her efforts on the mobile app, which lets customers order before arriving at the store.

But the pandemic has prompted other restaurants to introduce similar apps, eroding the company's advantage, an industry insider observed. Existing-store sales are close to plateauing, and "another record profit is a tall order," a brokerage analyst said.

At a news conference Friday, Casanova stressed that the company has entered the next stage of growth, to be led by Hiiro.

McDonald's marks its 50th anniversary in Japan in 2021. The fast-food giant needs to keep offering new attractions to draw customers in order to continue on its growth path.

A McDonald's in Tokyo: Incoming CEO Tamotsu Hiiro has been working on home delivery in Japan. (Photo by Kosaku Mimura)

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