Fears over mad-cow disease and a slowing economy have forced McDonald's to scale back its ambitions in Japan.

The fast-food giant is closing 130 of its Japanese outlets this year while opening just 220, the Nihon Keizai Shimbun newspaper reported.

Although that still results in net growth for the restaurant chain in 2002, it is well below the pace of expansion envisaged earlier.

Over the past five years, the firm has increased its network by a net 250-450 restaurants every year.

When shares in McDonald's Japan were floated in Tokyo last July, the firm said it was on course to triple its branch network, with new restaurants in schools, hospitals and even on the famous bullet train.

Meat mauled

Part of the reason for McDonald's slowing growth has been Japan's stuttering economy.

All retailers have been hit by the slowdown, and some high-profile High Street names have gone bust.

But far more dangerous for McDonald's has been the dramatic spread of bovine spongiform encephalopathy, or mad cow disease, which broke out last September.

The BSE crisis has sparked a collapse in beef sales, and McDonald's Japan reported its fifth consecutive monthly fall in turnover in February.

Change of management

The company seems to be rethinking its strategy more generally.

Until February, it aimed to compete aggressively on cost, with a wave of half-price offers.

But as sales dropped, the price campaign was ended, and Den Fujita, the company president who masterminded the strategy, is to step down at the end of this month.