The Kura “revolving sushi” restaurant chain has no Michelin stars, but it has succeeded where many of Japan’s more celebrated eateries fall short: Turning a profit in a punishing economy.
Efficiency is paramount at Kura: Absent are the traditional sushi chefs and their painstaking attention to detail. In their place are sushi-making robots and an emphasis on efficiency.
Absent, too, are flocks of waiters. They have been largely replaced by conveyors belts that carry sushi to diners and remote managers who monitor Kura’s 262 restaurants from three control centers across Japan.
Illustration: YUSHA
(“We see gaps of over a meter between your sushi plates — please fix,” a manager said recently by telephone to a Kura restaurant 16km away.)
Absent, too, are the exorbitant prices of conventional sushi restaurants. At a Kura, a sushi plate goes for ￥100 (US$1.22).
Such measures are helping Kura stay afloat even though the country’s once-profligate diners have tightened their belts in response to two decades of little economic growth and stagnant wages.
Many other restaurants and dining businesses in Japan have not fared so well. After peaking at ￥29.7 trillion in 1997, the country’s restaurant sector has shrunk almost every year as a weak economy has driven businesses into price wars — or worse, sent them belly-up. In 2009, restaurant revenue, including from fast-food stores, fell 2.3 percent, to ￥23.9 trillion — 20 percent below the peak, according to the Foodservice Industry Research Institute, a research firm in Tokyo.
Bankruptcies have been rampant: In 2009, 674 dining businesses with liabilities of more than ￥10 million went under, the highest number in the last five years, according to Teikoku Data Bank, a credit research company.
In November 2009, Soho’s Hospitality, the company behind celebrity restaurants like Nobu and Roy’s, filed for bankruptcy. Roy’s is now run by another company, while Nobu’s chef, Nobu Matsuhisa, has opened a new restaurant elsewhere in Tokyo with Robert De Niro.
Along with other low-cost restaurant chains, Kura has bucked the dining-out slump with low prices and a dogged pursuit of efficiency. In the company’s most recent fiscal year, which ended on Oct. 31, net profit jumped 20 percent from the same period a year earlier, to ￥2.8 billion.
In the last two months alone, Kura has added seven stores.
“If you look at the restaurant business, consumers are still holding back because of employment fears and falling incomes and there’s no signs that will change,” said Kunihiko Tanaka, Kura’s chief executive, who opened Kura’s first sushi restaurant in 1995.
“Amid these worsening conditions, our company feels that consumer sentiment matches, or is even a tail wind” to the Kura business, he told shareholders earlier this year.
The travails of Japan’s restaurant industry, and the changes in Japanese dining habits, may be among the most visible manifestations of how Japan’s “bubble economy” excesses in the 1980s have given way to frugal times since the bubble burst in 1990.
With wages weak — average annual private-sector pay has fallen 12 percent in the last decade, to ￥4.05 million in 2009 — the Japanese now spend less on eating out. An average single-person household spent ￥163,000 on dining in 2009, 27 percent less than in 2000, according to detailed budget surveys compiled by the Ministry of Internal Affairs.
In a survey by Citizen Holdings, the watchmaker, of 400 men aged between 20 and 50, the average time spent at cafes and restaurants plunged from 7 hours, 52 minutes a week in 1990 to 2 hours, 25 minutes last year.
An aging population is also depressing restaurant sales. More than one-fifth of Japan’s population is already over 65 and surveys indicate that older people tend to eat out less. The population is also shrinking, reducing the restaurants’ potential customer base.
Meanwhile, Japanese companies have cut back sharply on their entertainment expenses, further hurting restaurant sales. Total corporate spending on dining and entertainment has halved from a peak of ￥9.5 trillion in 1991 to ￥4.8 trillion in 2008, according to data from the National Tax Agency.
“The restaurant industry here is so linked to the state of the economy and that’s why we’re seeing this decline,” said Munenori Hotta, a food service industry expert at Miyagi University in Japan.
“In this climate, even top restaurants are having to moderate their prices to keep attracting customers,” he said.
Japan’s dining-out boom had its roots in the 1970s and 1980s, as incomes grew and rural populations flocked to big cities. So-called family restaurants that brought cheap, Western-style food to the masses flourished in that era. So did US fast-food chains, which were considered novel at the time. Kentucky Fried Chicken opened its first restaurant in 1970, followed by McDonald’s in 1971.
At the other end of the price range, a new generation of wealthy Japanese savored imported French wines at lavish restaurants. By 1986, there were 503,088 restaurants across Japan, according to records from the Internal Affairs Ministry. That was nearly double the number from 15 years earlier — and it was more restaurants than now operate in the US, which has more than twice the population of Japan.
After the bubble burst in 1990, new low-cost restaurant chains that offered pizzas for as little as ￥400 started to spread across Japan and restaurateurs spoke with alarm of ready-made, -convenience-store meals that were siphoning off sales.
In the depths of the slump, in 1995, Tanaka started a company based on serving quality sushi on the cheap.
His idea of using conveyor belts to offer diners a steady stream of sushi on small plates was not a new one, an Osaka-based entrepreneur invented such a system in the late 1950s, but Tanaka set out to undercut his rivals with deft automation, an investment in information technology, some creativity and an almost extreme devotion to cost-efficiency. In Japan, where labor costs are high, that meant running his restaurants with as few workers as possible.
Instead of placing supervisors at each restaurant, Kura set up control centers with video links to the stores. At these centers, a small group of managers watch for everything from wayward tuna slices to outdated posters on restaurant walls.
Each Kura store is also highly automated. Diners use a touch panel to order soup and other side dishes, which are delivered to tables on special express conveyor belts. In the kitchen, a robot busily makes the rice morsels for a server to top with cuts of fish that have been shipped from a central processing plant, where workers are trained to slice tuna and mackerel accurately down to the gram.
Diners are asked to slide finished plates into a tableside bay, where they are automatically counted to calculate the bill, doused in cleaning fluid and flushed back to the kitchen on a stream of water. Matrix codes on the backs of plates keep track of how long a sushi portion has been circulating on conveyor belts; a small robotic arm disposes of any that have been out too long.
Kura spends ￥10 million to fit each new restaurant with the latest automation systems, an investment it says pays off in labor cost savings. In all, just six servers and a minimal kitchen staff can service a restaurant seating 196 people, company spokesman Takeshi Hattori said.
“It’s not just about efficiency,” Hattori said. “Diners love it too. For example, women say they like clearing finished plates right away, so others can’t see how much they’ve eaten.”
However, traditional sushi chefs have not fared so well. While the overall market for conveyor belt sushi restaurants jumped 42 percent to ￥428 billion in 2009 compared with 2003, higher-end sushi restaurants are on the decline, according to Fuji-Keizai, a market research firm.
“It’s such a bargain at ￥100,” said Toshiyuki Arai, a delivery company worker dining at a Kura restaurant with his sister and her three-year-old son.
“A real sushi restaurant?” he said. “I hardly go anymore.”
With escalating US-China competition and mutual distrust, the trend of supply chain “friend shoring” in the wake of the COVID-19 pandemic and the fragmentation of the world into rival geopolitical blocs, many analysts and policymakers worry the world is retreating into a new cold war — a world of trade bifurcation, protectionism and deglobalization. The world is in a new cold war, said Robin Niblett, former director of the London-based think tank Chatham House. Niblett said he sees the US and China slowly reaching a modus vivendi, but it might take time. The two great powers appear to be “reversing carefully
As China steps up a campaign to diplomatically isolate and squeeze Taiwan, it has become more imperative than ever that Taipei play a greater role internationally with the support of the democratic world. To help safeguard its autonomous status, Taiwan needs to go beyond bolstering its defenses with weapons like anti-ship and anti-aircraft missiles. With the help of its international backers, it must also expand its diplomatic footprint globally. But are Taiwan’s foreign friends willing to translate their rhetoric into action by helping Taipei carve out more international space for itself? Beating back China’s effort to turn Taiwan into an international pariah
Typhoon Krathon made landfall in southwestern Taiwan last week, bringing strong winds, heavy rain and flooding, cutting power to more than 170,000 homes and water supply to more than 400,000 homes, and leading to more than 600 injuries and four deaths. Due to the typhoon, schools and offices across the nation were ordered to close for two to four days, stirring up familiar controversies over whether local governments’ decisions to call typhoon days were appropriate. The typhoon’s center made landfall in Kaohsiung’s Siaogang District (小港) at noon on Thursday, but it weakened into a tropical depression early on Friday, and its structure
Taiwan is facing multiple economic challenges due to internal and external pressures. Internal challenges include energy transition, upgrading industries, a declining birthrate and an aging population. External challenges are technology competition between the US and China, international supply chain restructuring and global economic uncertainty. All of these issues complicate Taiwan’s economic situation. Taiwan’s reliance on fossil fuel imports not only threatens the stability of energy supply, but also goes against the global trend of carbon reduction. The government should continue to promote renewable energy sources such as wind and solar power, as well as energy storage technology, to diversify energy supply. It
RSS