Bankruptcies one after another…The “1,000 yen wall” that stands in the way of ramen shops The true nature of the “fear” of not being able to raise prices even when prices soar: Tokyo Shimbun TOKYO Web

The number of ramen restaurants closing is increasing. Material and labor costs are soaring, but compared to other food and beverage industries, it is difficult to pass on the costs. The so-called “thousand yen wall”. Since it has been a popular national dish for a long time, it is an unwritten rule that if it crosses this barrier, the number of customers will stop. However, there are many ramen restaurants that use high-quality ingredients, and it seems unlikely that the global price hike will subside for some time. Will the wall be broken down? (Naoaki Nishida)

◆”If it’s more than this, people will say it’s expensive.”

“We didn’t compromise on the taste of the ingredients and kept the price as low as we could. But now…”

Additive-free ramen from Itabashi Ward, TokyoKanade（Kanade）”, the male store owner (40) sighs. There is a sign on the front of the store that says “We will be closing on the 26th of this month.” As the name suggests, everything from the chicken in the soup to the wheat in the noodles, eggs, and soy sauce is organic. One bowl of ramen costs 900 yen. “If it’s more than this, people will say it’s too expensive.”

According to a survey by Tokyo Shoko Research, 28 ramen shops had gone bankrupt nationwide by August of this year, a sharp increase of 3.5 times compared to the same period last year. If things continue at this pace, the number could reach 42 cases a year, the highest in the past 15 years. 90% of businesses have capital of less than 10 million yen and fewer than 5 employees, with a conspicuous number of micro-scale businesses. An industry source said, “If you include the closing of individual stores and the downsizing of multiple stores in urban areas, the number of store closures is much higher.In addition to the soaring prices of ingredients, there is also a serious shortage of part-time workers.The self-restraint of business due to the coronavirus pandemic is continuing to grow. “I’m working on it,” he says.

While the cost ratio for ramen is generally considered to be 30 to 35%, at the man’s restaurant it was just under 40%. Prices for vegetables and seasonings, which are the core of flavor, had soared, and the burden of utility costs had increased, but the store decided to close the store instead of raising prices, saying that “consumers were not satisfied.” “It may seem contradictory, but at the same time, I wanted people to eat carefully selected items at reasonable prices, and at the same time, I also wanted to attract a wide range of customers.The appeal of ramen is that it is a popular food.”

◆Cashless stores are popular even for purchases over 1,000 yen

When did people start talking about this “wall”? It has been appearing frequently in ramen magazines since around 2010. Tsuyoshi Yamamoto, a ramen critic who eats 700 bowls a year and publishes information on store openings and closings, says, “Restaurants that use branded ingredients and additive-free foods have appeared, and some front-runner store owners are starting to talk about it.” Since then, high-end ramen with ingredients such as truffles and shark fin and priced at several thousand yen per bowl has gradually increased.

However, in the ramen industry, where the hurdles for opening a store are relatively low and competition is fierce, “there is still a deep-seated fear of being overwhelmed by store owners.” This is because, compared to other popular foods such as gyudon and curry, “an overwhelming number of individual stores operate and there is no price leader who can influence other stores.” On the other hand, ramen priced in the 1,000 yen range is also gaining popularity at cashless specialty stores scattered mainly in urban areas. “The image of common people is psychologically influenced in some ways. You might call it the ‘wall of the 1,000 yen bill.'”

Will the wall continue to rise for many independent stores? Mr. Yamamoto said, “Price increase announcements have come to resemble apologies.With the current economic policy, we cannot hope to stimulate consumer confidence, and ramen shop owners who are afraid of losing customers are reluctant to raise prices.” “I think they’ll probably take a second look,” he continued.

“In the end, rather than proactively tearing down walls, managers may not be able to bear the rise in overhead costs and end up being pushed inside the wall.”