business

Higher restaurant prices add to pressure on consumers in Japan

30 Comments
By Yuki Yamaguchi

When Yoshihiko Koyama ordered a fried dumplings set meal at a well-known Chinese chain restaurant in Tokyo in September he noticed something different -- the price was a little higher than his previous visit.

Koyama was charged 710 yen instead of the 670 yen he usually paid for the set menu in a Hidakaya restaurant in the capital's Okachimachi district, illustrating how eateries and restaurant chains such as Hiday Hidaka Corp are passing on soaring material and energy costs to consumers.

"It feels like a small increase but it's happening at other restaurants too," said 74-year-old Koyama who works in the jewelry industry in the area. "The cumulative effect can be huge."

Imported raw materials from cooking oil to flour have become more expensive on the back of the war in Ukraine and the yen's depreciation, which saw it hit a fresh 24-year low against the U.S. dollar in early September, adding to the pressure on consumers in the world's third-largest economy who are already struggling with higher prices for groceries and fuel.

Rising labor costs are also adding to the restaurant sector's woes as it has become more difficult to recruit staff since many eateries cut opening hours or closed temporarily amid the coronavirus pandemic.

According to a survey of 122 Japanese restaurant chains by private credit research firm Tokyo Shoko Research, 71 companies had raised prices or announced plans to do so this year as of early September. Of those, five chains had made such announcements twice, it showed.

Japanese restaurant chain Yayoiken, which operates more than 360 eateries nationwide, has been charging more for set meals and rice bowl dishes since September due to increased prices for imported beef and pork.

It is now offering its popular ginger pork set meal at 670 yen, up 30 yen, while the price of its pork cutlet rice bowl has been raised by 20 yen to 710 yen.

Diner chain Denny's raised the prices of some of its menu items such as pasta and steak by 10 to 80 yen from Sept. 6, saying, "It has become difficult to strike a balance between prices and quality" amid soaring material costs.

The chain said, however, it was not increasing the prices of some of its popular dishes such as hamburger steak and desserts to retain customers.

Conveyor-belt sushi chain Sushiro has said it will raise prices at its restaurants from October to cover higher material, logistics and labor costs.

McDonald's Co (Japan), curry restaurant operator Ichibanya Co and Torikizoku Holdings Co, which operates a chain of izakaya Japanese-style pubs, have also passed on higher costs to consumers this year.

Wu Haokai, a student from China who is enrolled in an MBA program at J.F. Oberlin University in Japan, said that as he supports himself with a part-time job, he is concerned the recent price increases will add to his financial burden.

"It worries me that those restaurants I often visit are raising prices," the 25-year-old said. "It's hard to cut back on the frequency of eating out as I enjoy doing so with my friends."

With a growing number of restaurants forced to increase prices, many in the sector are anxious about losing customers.

While Skylark Holdings Co, the operator of the Gusto restaurant chain, is feeling the negative impact of price increases implemented in July, it said it may raise prices again if it cannot absorb higher costs.

"Customers are becoming increasingly cautious about their budgets," Skylark President Makoto Tani said. "Our customers are decreasing, especially in rural areas."

The company said in August that it plans to close about 100 of its group restaurants due to rising costs.

Shun Tanaka, a senior analyst at SBI Securities Co, said, "A lot of people became accustomed to buying ready-made food at supermarkets or cooking at home instead of eating out during the coronavirus pandemic."

If restaurants cannot offer added value such as better ingredients, they could lose customers, he said. "Demand has not recovered yet. We might see more restaurant closures in the future."

© KYODO

©2022 GPlusMedia Inc.

30 Comments
Login to comment

Higher restaurant prices add to pressure on consumers in Japan

Restaurant price going up while people have same or even less money. How that will move economy?

New Capitalism?

2 ( +16 / -14 )

Prices up and wages stagnant!

Welcome to Japan.

-7 ( +14 / -21 )

Rising labor costs are also adding to the restaurant sector's woes

how so? Salaries aren’t rising.

more hired help? Obviously, if there’s more customers since corona started. But that’s already a given.

> as it has become more difficult to recruit staff since

because owners refuse to pay a decent amount

many eateries cut opening hours amid the coronavirus pandemic.

which still makes no sense. How is opening for 6 hours instead of 8 supposed to lower the chances of catching corona? It doesn’t. All it does is lower your chances for bringing in customers.

just like cutting back on the amount of trains or supermarket entrances, it only made things worse, not better.

3 ( +13 / -10 )

The perfect recipe for a recession is to have Inflation with fixed wages.

14 ( +17 / -3 )

Just a few days, I went to a restaurant where I sometimes go to eat good Sashimi.

Bssically I always order the same menu.

The price was same, but the amount was less.

14 ( +18 / -4 )

Im gonna go on a limb and say the presidents and CEOs of those companies are doing quite fine sitting at the top, regardless of price hikes and cutbacks.

10 ( +15 / -5 )

Shun Tanaka, a senior analyst at SBI Securities Co, said, "A lot of people became accustomed to buying ready-made food at supermarkets or cooking at home instead of eating out during the coronavirus pandemic."

Because it's cheaper and no worse.

If restaurants cannot offer added value such as better ingredients, they could lose customers, he said. "Demand has not recovered yet. We might see more restaurant closures in the future."

There are way too many restaurants in Japan.

-3 ( +7 / -10 )

which still makes no sense. How is opening for 6 hours instead of 8 supposed to lower the chances of catching corona? It doesn’t.

I am not great at math, but if you are only open for 6 hours instead of 8, you lower the chances your staff getting infected by 25%?

-4 ( +4 / -8 )

It a Chinese restaurant in our city,it run by Chinese ,who ever own the restaurant,sunk a lot of money in it,it used to be a grocery store,their customers are Black , Mexican and White people,they were shutdown almost a year,they survived,they even open a crab restaurant nextdoor,it an all you can eat buffet

-6 ( +2 / -8 )

I used to go out to eat at least 2-3 times a week. Even during the pandemic, I would still order take out. However, with the yen decreasing the value of the money I send home, prices rising and salaries unchanged for years, and now some new government change requiring everyone to get on the national pension plan in order to support the elderly, my going out will be reduced to about once a month if I can swing it.

Maybe, the people need to start telling the government enough unless they start leaning on companies to hike wages or face tax hikes themselves.

2 ( +6 / -4 )

Eating out in Japan is crazily cheap compared to other countries. The easy solution for the consumer is to just eat out less. Unfortunately many smaller restaurants will be forced to close, which is very sad. Those local, family-owned joints are what Japanese cuisine is all about.

3 ( +9 / -6 )

At least you don't have to leave a tip here in Japan.

7 ( +9 / -2 )

sure prices are up to salary for part timers are same low as before.

if changed in usd are much lower now.

in my country of origin lunch menu for standard restaurant went up from 4 euro to some 6 euro now and yes these are many who went up to 7 or 8 euro for lunch menu.

Japan is no difference and even staff salary same or even lower-prices are to go up literally for everything.

if you cant afford-make dinner at home.

-5 ( +0 / -5 )

@sakurasuki : welcome to the Great Reset of the WEF !

@kurisupisu : that's a worldwide consequence, and you can rejoice to be in Japan and not Europe...

4 ( +5 / -1 )

The increase in restaurant meals is a world wide problem. Some basic items used in a restaurant (oil, flour, etc) have gone up significantly in price.

Still, in Japan for lower to middle style restaurants prices are cheaper than most first world countries.

1 ( +5 / -4 )

I used to go out to eat at least 2-3 times a week.

I thought you were going to say next, that you are going out much less now, but ...

my going out will be reduced to about once a month if I can swing it.

Get back to us when you actually did reduce your going on. Until that happens, the restaurants increasing the prices are the ones winning.

-3 ( +1 / -4 )

Unfortunately many smaller restaurants will be forced to close, which is very sad. Those local, family-owned joints are what Japanese cuisine is all about.

It's not a given unalienable right that every business needs to thrive. Many restaurants may close, reflecting the decreasing population and shifting in demographics. But many will survive. Japanese cuisine is in no danger, if there isn't an izakaya on every corner.

-3 ( +2 / -5 )

Politicians looking at the price increase at their iketsuke Ginza steak house: Oh well, not our money anyways, ryoushu-sho kudasai. Oh, and increase the consumption tax so that our spending funds are able to compensate.

-4 ( +2 / -6 )

The same can be said for company execs going to nomikais at the company's expense. They will just raise their product's price to compensate.

-4 ( +2 / -6 )

Japan’s minimum wage is about 1000 yen. Roughly 7 US dollars. Minimum wage is around 15.00 in certain parts of the US.

Japan should realize it harms their economy to have such a low minimum wage in relation to of living. It makes Japan quite undesirable a place to live, as retail prices never go down and inflation makes the wage minuscule.

-3 ( +5 / -8 )

Japan has the most restaurants per capital in the world. Clearly there are too many restaurants trying to squeeze out profits while just barely paying the bills. And with many Japanese complaining about even small price increases it puts even more pressure on these restaurants.

I’ve got friends here who have owned restaurants before and they all say they’ll never do it again. It’s a horrible way to earn a living.

1 ( +4 / -3 )

I bought 2 camp chairs and a collapsible table.....now wife and I eat out with bento boxes by riversides and beaches.

More fun , cheaper, less Covid risk.....plus doggie always welcome.

1 ( +3 / -2 )

It's not a given unalienable right that every business needs to thrive. Many restaurants may close, reflecting the decreasing population and shifting in demographics. But many will survive. Japanese cuisine is in no danger, if there isn't an izakaya on every corner.

I agree with you. It's survival of the fittest at the end of the day. Still a shame when those smaller stores that make great food go out of business though.

0 ( +1 / -1 )

A local bento shop I go to whacked another 100 yen increase on to all of its bentos this week.

Just a standard karage-ben has gone from 480 yen pre pandemic to 680 yen today.

-2 ( +1 / -3 )

Was out and about in Tokyo with my partner on Saturday night. Our favorite restaurant was closed but not to stop the party animals.

We find an Italian place and had appetiser, fish, steak, salad, pizza, ywo glasses of sparkling, a bottle of house wine. All Came to ¥9,200 for two. That's a good price by the way for an excellent meal. Lots of kiddies in the restaurant and everyone chilling and having a good time, too.

All this talk about doom and gloom is just queer. You need more PMA (positive mental attitude)

-2 ( +1 / -3 )

I used to eat lunch daily at restaurants.

Then I cut back to 2x a week and brought something from home.

Then I cut back to once every few weeks.

Then I cut back to once a month. As prices rise, the customer adjusts.

1 ( +1 / -0 )

"It worries me that those restaurants I often visit are raising prices," the 25-year-old said. "It's hard to cut back on the frequency of eating out as I enjoy doing so with my friends."

Obviously having to pay more for each visit will make it easier to cut back on the frequency until it becomes possible, visiting a restaurant a certain number of times is not exactly something as important as paying your electricity bills, so if people can afford only going 3 times a month instead of 4 that is what is going to happen. The pressure is much more important on the restaurant side than on the consumers.

-2 ( +0 / -2 )

If restaurants cannot offer added value such as better ingredients, they could lose customers, he said. "Demand has not recovered yet. We might see more restaurant closures in the future."

We have been seeing restaurant closures for the past 2 years or so.

Obviously having to pay more for each visit will make it easier to cut back on the frequency until it becomes possible, 

No, it makes it more expensive to eat out.

-2 ( +0 / -2 )

Abolish the sales tax on all food items, cooked and uncooked.

At the end of the fiscal year 2020, the number of restaurants in Japan amounted to approximately 1.41 million facilities.

An estimated 60,000 restaurants in Tokyo.

Number of restaurants in Japan from fiscal year 2015 to 2020

https://www.statista.com/statistics/1230470/japan-restaurant-numbers/

There were 842 restaurant bankruptcies through 2020 in Japan, according to the private credit research company Tokyo Shōkō Research.

Total resturant sales ¥11 trillion.

0 ( +1 / -1 )

No, it makes it more expensive to eat out.

Making something not necessary more expensive obviously makes it easier to justify it doing it less frequently, your comment do not negate what you are quoting, in fact just says the same thing.

-1 ( +0 / -1 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites