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Global Management Forum 2019

McDonald's Japan CEO sees 'a lot more potential' in aging society

Fast-food chain aims to roll out mobile ordering nationwide early next year

McDonald's Japan President and CEO Sarah Casanova speaks to the Nikkei Asian Review during the Nikkei Global Management Forum. (Photo by Yoichi Iwata)

TOKYO -- Japan's aging population does not mean opportunities in the restaurant sector are drying up, the top executive of McDonald's Holdings (Japan) said in an interview on Oct. 28.

The country's restaurant business still has "a lot more potential," said President and CEO Sarah Casanova, who was attending the Nikkei Global Management Forum. Despite population decline and a shortage of workers, the CEO of the burger chain remains optimistic.

"If you think about the trends that are happening right now, they all just point to opportunity," said Casanova. Japan's demographic changes -- more women entering the workforce, more seniors retiring, more single-person households and more tourists -- are all "good" for the company's business, she said.

Casanova explained that time-pressed families and singles "value the convenience that McDonald's offers," while seniors head to the restaurants for a comfortable place to sit and chat. She suggested it is becoming more important for restaurant businesses to cater to various different types of customers.

One tool for doing that is a mobile ordering app, which was introduced in several areas in April. Customers can order food in advance so that it is ready when they get to the restaurant. McDonald's aims to take the system nationwide "early next year," Casanova said in the interview.

But while Casanova wants to take advantage of digital advances, she is focused on enhancing the in-store experience, arguing that "technology creates a barrier" to human interaction.

Earlier this year, McDonald's started to introduce hospitality specialists to improve engagement with customers. These staff members interact more with customers, say, by delivering food to tables.

Happier customers may mean higher sales. Through September, same-store sales increased for 46 straight months.

Casanova said the company will keep encouraging exchanges between people. "Restaurants continue to be important and it is not all about automating everything."

Social responsibility is becoming more important in the industry as well, she noted. McDonald's in July started to collect used Happy Meal toys -- mainly made of plastics -- for recycling nationwide. Casanova said the company is currently pushing a transition from plastics to paper, such as by swapping its iced coffee cups. "We are determined to find the answer," Casanova said.

In September, the U.S. McDonald's experimented with selling plant-based burgers in certain parts of Canada, using patties from a supplier called Beyond Meat. Although Casanova said there are "no plans to launch it in Japan right now," she added that the company is "watching the test very carefully."

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