- TOKYO (Reuters) - Shares
in fast-food giant McDonald's Holdings Co (Japan) hit a fresh lifetime
low on Monday on concerns that aggressive cuts to its hamburger prices
will not be enough to reverse dwindling sales.
- The stock shed 1.1 percent to 2,690 yen in morning trade,
having now lost 47 percent from a lifetime high of 5,080 yen hit soon after
McDonald's Japan listed on the Jasdaq market in July last year.
- Sales at McDonald's Japan's 3,800 outlets have tumbled
since the outbreak of mad-cow disease in Japan last September, despite
reassurances that it only uses imported beef.
- On Monday, the Japanese unit of U.S. fast-food giant
McDonald's Corp began selling plain hamburgers for 59 yen (49 cents), down
from 80 yen, and cheeseburgers for 79 yen instead of 120 yen -- their lowest
prices ever in Japan.
- But investors say they doubt whether the cuts can reverse
a downtrend in same-store sales, while analysts said the price cuts could
encourage other fast-food restaurant chains to follow suit, adding to the
deflationary pressures already hurting the sector.
- A spokesman at unlisted rival Lotteria, a hamburger chain
with around 640 stores nationwide, said the company would cut prices of
its set menus, comprised of hamburgers, fries and drinks, by as much as
25 percent from August 10.
- McDonald's is due to announce half-year earnings on Friday.
- Last month the Nihon Keizai Shimbun business daily said
parent-only recurring profit at the fast-food giant likely plunged 52 percent
in the first half of 2002 to six billion yen ($50.48 million).
- A McDonald's spokesman declined to comment on the report.
- ©2002 Reuters Limited.