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Taisei Hikage is fighting a losing battle at his Tokyo ramen shop - not to attract customers, but to keep a lid on the price he charges for Japan's national comfort food in the face of an incessant rise in ingredient and fuel costs.
Since opening his shop in the west of the capital a year and a half ago, Hikage, 26, has raised menu prices three times but still struggles with rising costs. His top-selling "Special Ramen" is up 47%, selling for 1,250 yen.
"Traditionally ramen shops were supposed to offer something cheap and tasty," Hikage said between stirring big pots of broth and blanching noodles. "It's no longer cheap food for the masses."
The problems facing ramen vendors - a record number of shop operators are set to go bankrupt this year - reflect a cost-of-living crunch that has become a top issue for voters in Japan's general election on Sunday.
The ruling Liberal Democratic Party of Prime Minister Shigeru Ishiba, a self-described ramen fanatic, and opposition parties have pledged various measures to offset rising costs for businesses and households.
Those efforts to control rising prices, in a land emerging from decades of deflation, could tip an election where opinion polls show the LDP - which has ruled Japan for almost all of the post-war era - might lose its parliamentary majority.
Hikage, who said he will be too busy working in his restaurant to vote, hopes the victors will consider introducing subsidies to offset rising costs.
His award-winning noodles remain in demand despite the repeated price hikes, with long queues in front of his shop day and night.
Some of his competitors are not faring so well: 49 ramen shop operators with debts of at least 10 million yen filed for bankruptcy in the first seven months of the year, on track to exceed the 2020 record of 54 bankruptcies, according to credit research firm Teikoku Databank.
Hikage prides himself on using mostly domestic ingredients, but many ramen restaurants rely heavily on imported materials like the flour to make noodles.
Japan's import costs have risen as the yen has sunk. The currency hit a 34-year low against the dollar this year and has struggled to regain ground. Also boosting costs for ramen shops are higher energy and grain prices, triggered by Russia's war in Ukraine, as well as rising labour costs.
The plight of Japan's ramen shops illustrates a larger trend, as companies that fail to adjust to the era of inflation go under.
Nationwide bankruptcies in the six months to September jumped 18.6% from the same period last year to 4,990 cases, with a record number caused by inflation, said Teikoku Databank.
"Just like ramen shops, companies offering goods and services that are in demand are transferring costs to product prices and seeing their sales grow. Those struggling to pass on higher costs are being weeded out," said Dai-ichi Life Research Institute's executive chief economist Toshihiro Nagahama.
But Nagahama said politicians' tendency to dish out support measures to win votes may be counterproductive in the long term.
"If too many 'zombie' firms, or companies that cannot raise productivity or wages, are kept alive, they could be a drag on the Japanese economy," he said.
For now, Hikage said he will focus on serving quality dishes and hope the election can bring some kind of positive change.
"Our task now is to endure this and focus on offering something delicious, with our heads bowed to customers," he said.
© Thomson Reuters 2024.
36 Comments
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dagon
Affordable ramen and tarento eating on TV are the Japanese bread and circuses.
Maybe this will cause some social agitation among the average Taro.
リッチ
If they produced the noodles themselves they are looking at eggs and flour and I don’t see any price increases in either of those items. In addition bones have never been expensive and frankly the amount of vegetables have never been a lot. I guess if you just buy things and heat them up and serve them it could be tough but if you properly make them even 500 yen should get 10 times profit on the ingredients and well the food business has never been about high profits. It’s about volume.
リッチ
Perhaps sell gyoza and better drinks. Nearly the only drink choice st ramen is beer or free water. Staff often also don’t sell they just take orders. Changing world changing demographics
MarkX
リッチ
Not sure where you have been living, but the cost of eggs has really gone up, and there was just another case of bird flu in Hokkaido, so expect them to go up more. Also flour has also seen a huge rise in price, as the Ukraine is one of the bigger wheat producers and Russia keeps attacking, and stealing their wheat.
I feel for these small shops trying to make it, but I'm not sure how subsidies can help. We are all caught in this endless trap of raising prices, but not salary increases.
Aly Rustom
More terrible news. I love ramen. Alongside gyoza and chahan it is my favorite comfort food.
Hidakaya Chain has not really raised their prices that much. Its still very affordable and excellent value for what you pay.
Chabbawanga
There will inevitably be some consolidation in the market. There are an insane number of restaurants and bars still in city centres without the population to support them. Then you add the cost of living crisis and hey presto. There is no fix, expect people to eat out less, and more restaurants to close.
Burning Bush
That sounds like tourist prices and way out of what I'd pay for noodles. But, if people are buying it (top-selling) what is the problem?
In my station, I can get a good bowl of soba and topping for under ¥600, which is around the price of the top selling ramen 18 months ago according to the article.
What gives?
Yes. But some people can get the organic stuff cheap and buy bulk on a monthly cycle. If only Taisei could be so lucky.
kohakuebisu
47% or 850 to 1250 in two years is not normal. Its what you'd see occasionally in a banana republic, not an advanced economy. The same thing has happened to fish'n'chips in the UK, which is now 10GBP (2000 yen) to take home. Ramen uses cheap ingredients but involves boiling bones for 24 hours or more. We know a guy near us and he said his gas bill was 400,000 yen a month.
Personally I see this as being driven by completely avoidable wars in Ukraine and Palestine, Ukraine due to food production and the Middle East due to energy prices and attacks on shipping. The story of the global economy in recent years has been people in poorer countries exiting harsh poverty, but this will be reversing it.
The ramen shop guy could have voted this week, my daughter voted last Sunday, but probably surmises, I guess correctly, that voting won't make any difference to the price of his ramen.
Gene Hennigh
Say it ain't so. Maybe (but only maybe) I would eat ramen less often, but even at a high price I would at least eat it frequently, though maybe a little less, though. I don't pretend to know what the dynamics are entirely, but I hope the trend doesn't continue.
kurisupisu
I bought a 5 piece instant noodle pack for 100 yen last week and made 5 bowls…
Ken
If they raise the price of ramen I don't mind if it helps it stay in business. Nothing is more sad than when the ramen shop you go to monthly with your family closes down
Yubaru
Please share with everyone where are you living? Sure as heck not in Japan!
Prices of eggs and flour went up dramatically over the past year, and let’s not forget the amount of time and money that it would cost an individual shop owner to make their own noodles daily.
It is actually cheaper to purchase them from a wholesaler.
GBR48
Business is not complicated. When your costs go up, your prices go up in tandem with them. You maintain a profit that is enough to pay your staff, yourself, your overheads, your taxes, and save some for a rainy day. Or you close.
If customers complain, tell them to direct their anger at their government for failing them with duff policies that make them poorer.
People do, generally unwisely, take out loans to start a business. They often never recover - the repayments are just too onerous on top of everything else, especially when starting. It is better to save up the cash and then use it to start your business without an encumbering debt, or start small and grow.
Your profit is oxygen. Without it your business is dying. Only governments can lose money with wild abandon, because it is not theirs (it is yours).
Before you take the plunge, cost everything. Absolutely everything. Work in the business and learn the pitfalls. Know it inside out before you put your finances on the line. And think twice before starting a business that traditionally has a lot of bankruptcies. Don't assume that you are a genius with a foolproof plan and they were just idiots.
Selling low cost products caps your per sale profit. You have to shift a heck of a lot of cheap stuff to survive. And I doubt Tokyo commercial rents are cheap.
Being your own boss is tough. Long hours and lots of risk. It is do-able, but there is very little margin for error.
Support your local retailers, or they will vanish.
Peter Neil
nothing comes from ukraine or the balkans and there's no effect on prices
japan imports its wheat from canada, the u.s. and australia. wheat export prices (fob) have been falling for over 2 years. it's the yen.
lpg price has been rising and yen weakness has exasperated that. but, it's still about the same as 2018.
it's all the yen, nothing else. the curse of a weak currency.
Jalapeno
Cook the ramen at home. 500 yen tops, plus unlimited bean sprouts. I'll put my ramen up against any of these big boys.
wallace
Ramen restaurants do not have the space or time to make their noodles.
wallace
We make homemade ramen with good quality pork for less than ¥1,000 for two large bowls.
Burning Bush
Impressive. Did you make the noodles too from scratch?
Namorada
Companies need to start raising wages, not bonuses.
If customers weren’t constantly afraid of their financial situation they’d eat out more and circulate that money.
Companies that can do so will see a benefit.
Japantime
I also believe that most people are more health conscious now. Ramen is one of the worst foods to eat. Very unhealthy. Such a crazy price for Ramen. Better to eat a hamburger with lettuce, tomato and other healthy toppings.
Chabbawanga
Of course, blame someone else if your business fails. Its the governments fault!
wallace
JapantimeToday 12:24 pm JST
Ramen noodles are commonly made from wheat flour, water, salt, and kansui, an alkaline mineral.
It's the same as all other noodles. Not good. Not bad.
Nations survive on their noodles.
wallace
Burning Bush
We make homemade ramen with good quality pork for less than ¥1,000 for two large bowls.
On YouTube, you will find instructional videos on how to make ramen. Probably also how to make the noodles. Fresh noodles always taste the best.
wallace
Burning Bush
This YouTube will help you on your quest to make your ramen. Good luck.
https://youtu.be/nC4t1LDDt4A?si=T_HG245KH-aO1kBI
ian
Shops that remain would probably be the better ones.
More value for the consumers , less misses in trying out shops first time
ian
I'm always in a constant battle with myself to not finish off the soup
Burning Bush
I have never heard of a ラーメン屋 making its own noodles. Maybe if they did costs would drop.
wallace
The cost of making noodles would be greater than buying in.
The biggest expense is the boiling of the bone broth.
Blacklabel
i think up to 1750 yen is a reasonable price. Add a drink for a 2000 set.
Burning Bush
Not necessarily. Udon and soba restaurants make their own noodles.
Mr Kipling
Fresh ramen noodles in Gyomu Super have increased from ¥19 to ¥25 a packet. That is a bank breaking ¥6!
Sure they have other costs but if they can't make a profit selling ramen at ¥1,250 a shot then maybe it is time to move on.
ian
I don't anyone would have problems making profits at that price.
Problem is many shops can't sell their ramen at that price
Zaphod
Prices for everything are rising. Learn to live with inflation, which is still relatively low in Japan. Anyone curious to see how it can get should read about the Weimar Republic or Zimbabwe.
OssanAmerica
Too many Ramen shops everywhere in Japan.
Peter Neil
a declining population.
yes, a ramen shop across from another ramen shop, two doors down from another ramen shop.
it’s more of a hot lunchtime food and post-izakaya food.
economy of scale. the owner has to earn a living. chains thrive making less per unit with staff making half a living and lower costs with bulk buying.
heck, a restaurant burger and fries in the u.s. can cost 3,000 円 with tax and tip now. from 25 cents to $20+ in 50 years.
(a chain store masquerading as a ramen chain opened near me. they used spaghetti noodles, beef broth out of a can and a slice of ham sandwich meat and called it ramen. then they some ridiculous bowls of nonsense ingredients. and people thought it was real japanese ramen and food. be thankful for what you have.)
Tim Sullivan
Does Japan have to wait for all the old farts to die before firms can charge 2024 prices?