ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Inflation

Three-fourths of Japan restaurants plan price hikes: Nikkei survey

Symbol of deflation fading amid global inflation

The Sukiya beef bowl chain raised the price of its regular size product from 350 yen to 400 yen in December last year.

TOKYO -- Nearly three quarters of restaurant operators in Japan plan to raise prices in the current fiscal year, passing on the rising cost of ingredients to customers, a Nikkei survey found.

The survey also found that 39% of restaurant operators believe sales will not recover to pre-pandemic levels. With consumers becoming more thrifty, the survey revealed concerns that restaurants that raise prices will lose customers.

The annual food business survey was conducted from early April to early June, and covered 554 major food service companies. Nikkei received responses from 302 companies.

Seventy percent of those who responded raised their prices from the previous year's survey, and 73% of respondents said they would do so in fiscal 2022.

In addition to foodstuffs such as cooking oil and wheat flour, electricity and other utility costs are also rising. The rapid depreciation of the yen is also driving up costs for food service companies.

Of the companies that lifted prices over the past year, 79% said they would do so again in fiscal 2022. Even among those that have held prices steady so far, 62% said they planned to raise them in the future, indicating that the restaurant industry, which has been a symbol of Japan's long-running deflation, is at a turning point.

According to the survey, the most common reason cited for price hikes -- more than one reason could be given -- was rising food prices, cited by 96% of respondents. This was followed by higher logistics costs and higher labor costs, both of which were citied by 64% of respondents. As for the expected range of price increases, 48% of respondents answered 3% to 5%, with 21% saying prices would go up 5% to 10%.

As prices continue to rise, restaurant operators must build business models that do not rely on a low-priced items to drive sales.

Beef-bowl chain Sukiya, a subsidiary of Zensho Holdings, raised the price of its regular-size beef bowl by 14% from 350 yen to 400 yen ($2.60 to $3), including tax, in December. But by introducing new products and other measures, the company's sales have continued to rise versus the same month a year earlier for comparable stores.

Meanwhile, Food & Life Companies, which runs the Sushiro chain of sushi restaurants, will raise the minimum price for its sushi by 9 to 18 yen in October to 120 to 150 yen (including tax) per plate. As a result, the "100 yen per plate" strategy that the chain has followed since it was founded will have to change.

The company says it plans to intends to absorb part of the higher cost of ingredients and maintain product quality to keep hold of its customers.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more