Burger King grills up second Japan serving

TOKYO (Reuters) - Burger King, the world's No.2 hamburger chain, is back for a second shift in Japan after pulling out in 2001, locating its first restaurant right in the grill of rival McDonald's Japan.

The return of Burger King on Friday will be in the same building in Tokyo's Shinjuku entertainment district as the Golden Arches' Japan headquarters, while its CEO is a former McDonald's executive.

Shinichi Kasa, though, shook off ideas that competition in the $200 billion restaurant market centers on a single rival.

"Not only the hamburger business, but ramen and sandwich houses, convenience stores -- everybody is our competitor," said Kasa, a 29-year McDonald's veteran.

Burger King closed its Japan doors six years ago amid a pricing war and deflationary environment that hit some retailers.

But restaurant spending in the world's second-largest economy saw the first rise in same-store sales in over a decade in 2006, while Japanese, long-known as the world's top fish consumers, are expected soon to eat more meat than seafood, as demand for super-size "gutsy food", as it's dubbed by local media, heats up.

Kasa said Burger King plans eight restaurants serving New Zealand beef by the end of March and 50 over the next three years.

"In Japan our customers' minds have changed. Before, cheapest was the strength. Now, they like taste."

The Japan franchise, run by South Korea's Lotte Group and turnaround firm Revamp Corp., will initially push its "Whopper" menu, priced about 30 percent more than a Big Mac.

U.S. menu items will increasingly be available from later this year to take advantage of demand for bigger burgers, as seen by strong sales of McDonald's four-patty "Mega Mac".

THE KING'S IN THE BUILDING

Is Japan's No.1 worried about Burger King eating its lunch?

Shotaro Shimizu, a spokesman for McDonald's Japan, which has 3,824 restaurants and is just under half-owned by its U.S. parent , said he was surprised at the location of the first Burger King but welcomed the competition.

Kasa, meanwhile, says Burger King, with more than 11,100 restaurants globally and 730 in Asia, knows McDonald's is in the building, but it's concentrating on itself.

"Our competition is Mos Burger, Lotteria, everybody, every restaurant, not their headquarters or offices," Kasa said.

"We are a new brand -- I don't care about other players. Our focus is thinking about ourselves."