"Japan Lotteria Sale, Hope It's Not Due to Korean Lotte's Situation"

Poor Performance Leads to Store Reduction... Industry 4th Place
Japanese Media: "Choice to Focus on Confectionery Business"

Shin Dong-ju, chairman of SDJ Corporation, is leaving the Seoul Central District Court in Seocho-gu, Seoul, after the first trial sentencing hearing related to charges of embezzlement, breach of trust, and tax evasion on the 22nd. On that day, the court acquitted Chairman Shin. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jeon Jinyoung] As Japan's Lotteria is about to be sold to Zensho, Japan's largest food service conglomerate, former Vice Chairman of Japan Lotteria Holdings Shin Dongju mentioned on his social media (SNS), "I hope it is not being sold due to the Korean Lotte Group's financial liquidity issues."

On the 16th, when news broke that Japan Lotteria Holdings was selling Lotteria, former Vice Chairman Shin shared the article on his Twitter and posted this comment. He expressed regret, saying, "It is unfortunate that Lotteria, which started from the early days of the Japanese hamburger chain, is being sold," and added, "I hope it is not being sold because of the Korean Lotte Group's financial liquidity." He further noted, "Since the performance was not very good, I think it is fortunate that employee employment can be guaranteed."

The financial liquidity issue of the Lotte Group he referred to is interpreted as a remark targeting last year's financial problems of Lotte Construction. Last year, Lotte Chemical, the largest shareholder of Lotte Construction, provided emergency loans to support and prevent liquidity issues that occurred at the end of last year.

A tweet written by Shin Dong-ju, former Vice Chairman of Lotte Holdings Japan, on his account. He mentioned that he hopes the sale of Lotte Ria Japan was not due to financial difficulties within the Korean Lotte Group. (Photo by former Vice Chairman Shin's Twitter)

Meanwhile, Japan Lotteria Holdings plans to transfer all Lotteria shares to Zensho as of April 1. Lotteria Holdings explained that this sale is related to a review of the group's growth strategy and is "for sustainable growth in the future." The Lotteria brand name will be maintained for a certain period even after the sale.

In the local food service industry, there is analysis linking this to the poor performance of Japan Lotteria, which had struggled for some time. Lotteria opened its first store in Tokyo in 1972 and gained tremendous popularity in the 1980s, but in the 1990s, it was overtaken by Mos Burger as the second-largest in the industry, and from the 2000s, it began reducing the number of stores.

Lotteria Ikebukuro Higashiguchi Branch in Japan. (Photo by Lotteria Japan Official Website)

According to data compiled by Japan market research firm Soft Selling Co., Ltd. (NSS), last year, McDonald's had the most hamburger chain stores in Japan with 2,937 locations, followed by Mos Burger with 1,249 stores in second place, and KFC in third with 1,130 stores. Lotteria ranked fourth with 310 stores. The digital edition of Weekly Shincho Daily Shincho analyzed, "It appears the company intends to focus its resources on confectionery manufacturing and sales."

Zensho, which acquired Lotteria, is Japan's largest food service company with sales of 658.5 billion yen last year, operating gyudon chain 'Sukiya' and conveyor belt sushi specialty restaurant 'Hamazushi,' among others. Zensho stated regarding this acquisition, "We judged that synergies created through procurement of ingredients and logistics will contribute to future business expansion and development."