Tue, Mar 16, 2010 - Page 12 News List

Mos may open 200 Chinese outlets on rice burger demand

BLOOMBERG

Mos Food Services Inc, Japan’s second-largest fast food restaurant chain, might open 200 stores in China in the next five years, betting its rice burgers may be better suited to local tastes than offerings from McDonald’s Corp.

“We want our rice burgers to be our main menu offering because they’re particularly popular among the Chinese,” Mos president Atsushi Sakurada said in an interview in Tokyo on Friday, referring to the success of the chain in Taiwan.

“It’s possible to open about 200” outlets in eastern China, he said.

Mos Food, which offers rice burgers that use grilled rice patties instead of buns, tailors its menu to suit local preferences, with its Taiwanese restaurants selling ginger-pork and fried seafood burgers.

The Tokyo-based chain is re-entering China after it exited following the bankruptcy of a previous joint venture partner in 1997.

“The company may succeed overseas with its unique menu,” said Takashi Oka, an analyst at Toward the Infinite World Inc, who has a “neutral” rating on Mos Food. “The company is being cautious this time with store opening plans.”

The chain is trying to cultivate new markets to turn around sales that are forecast to decline for a second straight year amid stagnant wages and an aging population.

Mos Food aims to boost the number of Mos Burger restaurants abroad to 1,000 in the next 10 years from about 210 now, Sakurada said.

It’s considering entering South Korea and Malaysia in the new fiscal year beginning April 1 and may open stores in Europe, North America and Australia, he said.

The company opened a new outlet in the city of Xiamen through a joint venture last month. Mos Food opened its first Hong Kong store in October 2006.

Sakurada estimated that outlets in China would generate an average of ¥50 million (US$550,000) in annual sales, about 70 percent of the Japan average, he said.

Sales at stores open at least a year in Japan fell 1.1 percent in the first 11 months of this fiscal year.

The fast food company has about 1,340 Japan outlets with menu items that include rice burgers with tempura and barbecued beef.

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