The Japanese subsidiary of US fastfood giant McDonald’s may be about to ink an agreement with compatriot doughnut maker Krispy Kreme.
Mark Kalinowski, an analyst with Salomon Smith Barney, is reported by Reuters as saying in a research note that the partnership would allow McDonald’s to ramp up its operations in Japan by diversifying into the popular sweet treat. He reminded investors that the Japanese have already warmed to other American sweet snacks such as Cinnabon cinnamon rolls.
“The move seems in keeping with McDonald’s Japan’s strategic plans as well as Krispy Kreme’s recent moves to open in international markets,” Kalinowski wrote. “In addition, McDonald’s Japan is one of the foremost experts on Japan’s challenging real-estate market.”
The group is looking to rebuild its share price in Japan, where it currently lags 36% behind the start of the year following concern over the Japanese BSE crisis. Sales have failed to pick up long-term despite a brave price-cutting measure introduced in August.
For its part, Krispy Kreme has already embarked on an ambitious international expansion campaign following a successful entry into the Canadian market. The company has already outlined plans to open stores in Australia and New Zealand. Back in the spring, Krispy Kreme let it be known that it was also eyeing Japan, South Korea, Spain and the UK to roll out its global initiative.
To read an editorial comment by just-food.com managing editor Catherine Sleep on Krispy Kreme’s international expansion, click here.
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