Mitsubishi Corporation

vol.2 KFC Japan(2/3)

Our Endeavors - The stories behind our business

vol02 KFC Japan Endless Quest for Great Taste and Innovation

Stumbling Out of the Blocks

The Meisei Store in Nagoya, KFCJ's ver y first store, along with a menu from the early days

In light of the success at the Expo, KFCJ seemed poised to hit the ground running. However, a difference of opinion on store locations began to surface. Based on KFC's experience in the U.S., the American headquarters proposed opening stores near suburban shopping centers. However, as the use of family cars had not yet become widespread in Japan, MC argued against that approach, saying it would be best to begin by establishing stores in downtown locations. In the end, the American headquarters was not swayed by these arguments and the suburban strategy was adopted.
The first store opened in Nagoya at 10 AM on November 21, 1970 with great fanfare, including fireworks and giant advertising balloons. Two others stores were soon opened in Osaka. All the stores had been built in the parking lots of shopping malls and were complete with play areas for children. However, the stores struggled, just as people at MC had feared. Before a year had passed, KFCJ was deeply in the red, with a capital deficit reaching 100 million yen.
Inside MC, investigations into possibly withdrawing from the venture had begun. What they learned from initial failures was that choosing proper location would be critical.

The Tor Road Store (Kobe)

Staff at MC laid out their strategy: "Let's enhance the visibility of our stores by developing smaller outlets inside buildings in downtown districts and upscale residential areas. We'll give it one more shot—this time with locations that we believe will work." Everything hinged on the success of this new strategy. The location chosen for this last stand was Tor Road in Kobe, a district with many foreign residents, bordered by upscale residential developments.
The Tor Road Store, which opened in April 1972, carried the company's hopes for survival. "We've got to find a way to succeed." The staff gave it their all, selflessly working late into the night, with some even sleeping on beds fashioned from large bags of flour. All of this passion and hard work produced results. After four months, the store reached monthly sales of 3.6 million yen. The confidence of those involved in the business grew. "We are finally on the right track," they told each other. Next, they set their sights on opening the first store in Tokyo and the Aoyama Store opened later that year. The store was a great success, partly thanks to its great location, and it wasn't long before KFC became a household name.

In December 1973, KFCJ opened its 100th store. Around this time, stores were reliably posting monthly sales of 3 million yen and the company's performance stabilized. In December 1974, KFCJ began to extensively promote its Christmas campaign. Then in 1985, KFCJ introduced the Party Barrel, consisting of chicken, salad and ice cream. After this, the idea of having chicken on Christmas continued to spread and it is now an annual tradition for many people across Japan.
In order to ensure the highest quality, KFCJ proceeded to introduce its own system for accrediting its suppliers. In 1988, Japan Farm's Tarumi Plant** became the first cut chicken plant to win approval under this system. Today, efforts to ensure safety have become commonplace in the food industry, but it was KFCJ that led the way in Japan.

** An integrated system of poultry farming—encompassing production, processing and sales of chicken—was pioneered in the U.S., which is a leading nation in the livestock industry. MC was the first to introduce this system into Japan when it established Japan Farm in Kagoshima Prefecture in 1969.