McDonald's Japan announces first annual loss in 11 years

McDonald's Holdings Co. (Japan) Ltd. announced Thursday a group net loss of 21.84 billion yen (about 190 million U.S. dollars) in 2014, marking the fast food chain's first annual loss in 11 years as sales slumped due to string of food safety incidents.

The company also said revenue tumbled to 222.32 billion yen in the recording period, from 260.44 billion logged during the same time a year earlier, a drop of 14.6 percent.

The Japanese unit of the global fast-food giant also reported Thursday its same-store sales plunged 38.6 percent in January from a year earlier, owing to a fragment of rubber and piece of vinyl being found by customers in the company's food products.

The company's food safety incidents began earlier in July last year, however, when it was revealed that one of its meat suppliers was selling meat products that had already passed their expiry date.

McDonald's Japan president, Sarah Casanova, confirmed at a press conference Thursday that the company's monthly same-store sales have logged over 10 percent on-year declines every month since the meat scandal came to light in July.

"I would like to sincerely apologize once again for all of the great anxiety and concern that the recent reports of food related foreign objects have caused our customers," Casanova told a news conference.

After the expired meat incident, all products using the suspected supplier were halted, but other unrelated incidents raising questions about the company's food safety standards occurred around the country, battering McDonald's image in Japan and pummeling its sales figures.

Last year in August, media reports revealed a human tooth was found in a serving of French fries in Osaka, and in one of its branches in Fukushima Prefecture, a child was injured after biting on a piece of hard plastic that was lodged in a chocolate sundae dessert. The foreign object was later found to be a part of the machine that is used to make the popular desserts.

In January, in Aomori Prefecture, a piece of blue vinyl was found inside a chicken nugget. A similar case hit Tokyo a month earlier.

McDonald's Japan on Thursday declined to announce its earnings outlook for this year, as the cost of the food scandals are still being factored in, but Casanova pledged to regain customer confidence by ensuring such incidents will never happen again.

Early this week the company said third-party organizations would be utilized as one means of ensuring its food safety, as well as employee health and safety reeducation programs. Endi