News

McDonald's closing Japan units, navigating excess chicken wing supply

December 20, 2013

McDonald's struggles with its Japan business have been going on for years. In 2010, for example, the company closed more than 400 stores. Now, the Golden Arches is planning to shut down 74 more outlets in the country.

According to Bloomberg, the closures led McDonald's to cut its full-year profit forecast by 57 percent in the country. McDonald's Japan cited a drop in traffic that prompted the move.

Chicken wing abundance

Meanwhile, in the U.S., McDonald's reportedly has an abundance of leftover chicken wings from its Mighty Wings promotion in the fall. According to the Wall Street Journal, the company purchased about 50 million pounds of wings for the LTO, and about 20 percent of that inventory remains.

The company is planning another Mighty Wings promotion to sell the overstock. The wings are currently in frozen storage.

During the company's Q3 earnings call, CEO Don Thompson admitted the wings were slightly off on price (too high) and flavor profile (too spicy), and fell short of sales expectations.

The Wall Street Journal reports that franchisees have been told they must participate in another wing promotion or pay for the excess inventory.

Read more about operations management.