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Japan's Nitori furniture chain opens low-price steakhouses

Big box retailer to apply its integrated production-to-sales model to dining

Nitori's customers in Tokyo and Kanagawa Prefecture can take a break from furniture shopping to dine on chicken-fried steak and other entrees. (Source photos by Makoto Okada and Shihoko Nakaoka) 

TOKYO -- Japanese retailer Nitori Holdings is getting into the restaurant business, where it will apply the same cost-cutting model it has honed in its furniture business to steakhouses.

The company, which plans to get into ranching to more affordably supply its restaurants, sees opportunities in the dining sector, which has been hit hard by the COVID-19 pandemic.

Nitori has recently opened low-priced steakhouses in its furniture stores in Tokyo and Kanagawa Prefecture.

The eateries are outfitted with Nitori furniture and tableware, which allows the Ikea rival to reduce operating costs.

The plan is to follow the integrated production-to-sales model that Nitori has perfected in the furniture business.

The core menu item is chicken-fried steak, which sells for 500 yen ($4.58). Major family restaurant chains sell similar items for around 800 yen.

"Hamburg" steak, a popular item at some restaurants in Japan, sells for 700 yen, and rib-eye steak goes for 990 yen.

Take-away orders and home delivery service are also available.

Nitori Public, a subsidiary of Nitori Holdings operates the restaurant division. The restaurants' interiors are handled in-house by a specialized division that oversees the company's remodeling business.

To reduce rental costs, the company will locate its restaurants on the premises of about 450 Nitori stores across Japan.

Ingredients are purchased directly from food makers, but Nitori plans to get involved in livestock farming to cut costs.

In the furniture and home furnishings sector, Nitori has grown by handling everything from production to sales.

Nitori is performing well through the pandemic as people stay home and decide to improve their surroundings. It recorded its highest profit in 34 years for the year ended in February. Nitori expects spending at its stores will increase now that it is giving furniture shoppers the opportunity to get off their feet and have an affordable meal.

Japan's restaurant industry has been hit hard by consumer caution, emergency decrees and early closure requests, but Nitori believes it can operate its restaurants at relatively low costs, reduce the eateries' break-even point and increase overall profitability.

Initially, Nitori will prioritize its own facilities when it comes to locating restaurants but will later consider opening roadside steakhouses and eateries in other commercial facilities.

Nitori intends to continue pushing the industry's boundaries and is also considering the opening of more apparel stores.

Nitori expects to benefit from the synergies of having restaurants in its furniture stores but also intends to expand its restaurant business so that it can generate profits on its own.

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