The Surprising Winners of the “Battle without Honor and Humanity” for Survival of the Four Major Conveyor-belt Sushi Chains

Soaring raw material prices and the “Peropero Incident” of sushi terrorism caused serious damage.
In the spring of 2023, a battle has begun in an industry facing headwinds.

The revolving sushi chain, which has long been the king of the restaurant industry, is facing a yellow light. The low price of 100 yen per plate, which has been the lifeline of these chains, is reaching its limits due to the rush to raise the price of raw materials.

Conveyor-belt sushi is supported by the family segment. A few years ago, the total bill for four people would have been 5,000 yen, but now it can exceed 8,000 yen. If the quality of the ingredients declines, it is inevitable that customers will drift to other types of businesses, such as yakiniku and family restaurants.

The “Big Four” conveyor-belt sushi chains in terms of sales are Sushiro, Kurazushi, Hamazushi, and Kappa Sushi. Of these, Sushiro has raised its minimum price to 120 yen and Kurazushi to 115 yen, and some items are now priced in the 300 yen per piece range. Conveyor-belt sushi, which has made the “special occasion” feast much more accessible, is now often called “un-cost-effective.

The industry’s credibility has been shaken by a series of scandals involving the “Big Four” sushi restaurants. The conveyor-belt sushi industry, with a market size of over 700 billion yen, has suddenly turned around and entered a period of warfare for survival.

The following is a chronological order of the successive scandals that have occurred. In April 2010, a male manager in his 30s committed suicide by burning himself to death in the parking lot of a Kura Sushi restaurant. (1) In April 2010, a male manager in his 30s at Kurazushi burned himself to death in the parking lot of the restaurant, reportedly due to power harassment by his superiors. In March 2011, three customers of Kura Sushi were arrested for posting a video on the Internet showing them eating sushi from a lane with their hands.

Then, at the end of March of this year, allegations were reported that Hamazushi had been serving expired expired items. Of these incidents, the one that had the greatest impact on the public was the aforementioned “peropero incident. An employee of a conveyor-belt sushi chain said, “Immediately after the video was circulated, the restaurant was scandalized.

Immediately after the video was circulated, the number of customers dropped sharply for about a week. After that, as the heat subsided, the number of customers returned, but we have been receiving an increasing number of inquiries asking if the restaurant is safe.

The Emergence of “Non-Circulating Conveyor-belt Sushi

Why did the nuisances concentrate on the conveyor-belt sushi chains in the first place? Mr. Toshiyuki Kurita, a writer for a restaurant management magazine, analyzes as follows.

It can be said that the increase in the number of box seats and the reduction in the number of staff to reduce costs are the main reasons for the “sushi terrorism. While box seats provide a sense of privacy, they also make it difficult for customers to see what is going on around them. As more young people visit sushi restaurants unaccompanied by their parents or guardians, the proliferation of videos of disturbing behavior has probably increased.

The number of unauthorized visits is only the tip of the iceberg. A former employee of Kurazushi revealed the following.

“There were cases where the ginger that had just been replenished was completely gone, or where customers opened the lid of the “Bikkura Pon! Some customers opened the lid of the “Bikkura Pon!” gacha that you win when you eat sushi and tried to pull out the prizes directly. ……

An employee at Hamazushi also had the following to say.

We received a complaint that there was wasabi in the ramen, but wasabi is only placed at the customer’s table, so there is no way it could have been mixed in during the cooking process. I wouldn’t call it a nuisance, but I often encounter irrational complainers.”

In response to the series of disturbances, Kurazushi has installed AI cameras in its revolving lanes and introduced a system that automatically detects any suspicious activity. On the other hand, some chains, such as Sushi Choshimaru, which operates mainly in Tokyo and three other prefectures, have completely eliminated the revolving lanes.

The “straight line” system, which delivers freshly prepared dishes to each seat, can sometimes receive orders for nearly 200 dishes at once during peak lunchtime on holidays,” said Mr. Kikuchi. The rotating lanes are certainly less stressful on the staff, but ……

As a former Kappa Sushi employee explains, the future of each chain depends on its handling of the conveyor belt lane, which has played a role in reducing costs and the workload of employees.

Will the number of “non-turning conveyor-belt sushi” increase? Food journalist Daisuke Miwa wonders.

If the revolving lanes are eliminated, the number of nuisances may decrease,” says food journalist Daisuke Miwa. However, the “entertainment” that was the selling point of conveyor-belt sushi chains will be reduced, and this may lead to a loss of customers from the family segment. Kurazushi, in particular, has gained popularity with children with its “Bikkura Pon! and its patented “anti-bacterial sushi cover,” it can be seen that Kura Sushi is particular about its revolving lanes. Considering the cost of renovating the lanes and the need to close the business, it is difficult to discontinue them.”

What has covered the high cost ratio of sushi, which is said to be close to 50%, has been cost cutting through automation and a business model of opening large numbers of restaurants and selling thinly. The “Big Four” are no longer small chains.

A senior executive of a major sushi chain said, “The price of sushi items continues to go up.

The reason why the price of sushi items continues to rise is because Japan is losing out to the rest of the world in terms of fish catch. Conveyor-belt sushi chains have lowered prices by directly procuring fish by the boatload, but the catch is only tapering off. The weak yen makes importing raw materials more expensive. In addition, data-driven reductions in waste rates are saturated, and the only way to keep prices affordable is to change the way stores are built.

Sushiro, the industry leader, is also wondering whether to discontinue its revolving lanes. It is said to be waiting to see what one of its competitors will do.

That competitor is Hamazushi, the industry’s third-largest sushi restaurant. Hamazushi is a subsidiary of Zensho HD, which owns Sukiya, and although it has lost ground to Sushiro in terms of sales, Hamazushi’s unique management strategy shines through.

Hamazushi has a good roadside (suburban) strategy, opening restaurants in locations that are easily accessible by car and maintaining a price of 100 yen per plate excluding tax to prevent families from leaving. In addition, many stores have eliminated the rotating lanes, while increasing the speed of service in the linear lanes to increase customer satisfaction,” said Mr. Kurita.

Failure to proceed with price increases

I actually visited a roadside Hamazushi restaurant in the Kanto region. Located in a corner of a large commercial complex, the restaurant has a free parking lot with approximately 1,000 spaces. When I took a seat at the counter, no sushi was flowing in the lane in front of me. I operated the touch panel and ordered Hamazushi’s popular salmon, and within a minute or so, the sushi arrived from the straight lane.

The items were smaller than those at other chains, but there were some new items, such as beef ribs and seared duck, which was a novelty. It is nice to be able to eat without having to worry about spending too much money.

Masao Nagata, a food business consultant, says, “Kurazushi and Sushiro are both very good sushi restaurants.

I have the impression that Kurazushi and Sushiro failed in the way they raised their prices. The price increase itself was unavoidable, but they did not launch a campaign to attract customers as compensation. If Hamazushi, which is slightly inferior in terms of name recognition, launches more aggressive promotions, it has the potential to catch up with the top two companies.

Like Hama Sushi, Kappa Sushi is holding its own with a price tag of 100 yen per plate. In 2002, the chain became part of the Corowide umbrella, which owns brands such as Gyukaku and Otoya. However, there is still no sign of an upturn.

Mr. Miwa, the aforementioned sushi chef, says, “We have to put more effort into our rice and our sushi.

They are taking measures such as focusing on rice and offering all-you-can-eat meals, but they have yet to make any moves that will lead to long-term popularity. At this rate, there is no possibility that Sushiro will be overtaken by the Genki Sushi Group, which is No. 5 in the industry and is increasing the number of restaurants without revolving lanes.

Sushiro and Hama-zushi will be on par with each other, and Genki Sushi will join the Big Four. In the near future, an “unexpected winner” may rewrite the industry map.

One thing that is pointed out in this situation is the “growing pains” associated with the rapid expansion of the major conveyor-belt sushi chains. A look at the information on new restaurant openings by each company shows that many are closing at the same pace as new openings. There is a deep reason for this repeated scrap-and-build cycle. Mr. Nagata, the aforementioned sushi chef, says, “I have been a member of the conveyor-belt sushi chain for some time.

There has long been a theory that conveyor-belt sushi chains have a limit of 600 restaurants in Japan. Sushiro has already surpassed that number, and Hamazushi and Kurazushi are getting close. In addition to competing for customers, it will be difficult to secure employees. For the time being, we expect to enter a period of endurance in which we will fold unprofitable existing restaurants and maintain the market by opening new restaurants in Japan and overseas.

While there are whispers that the quality of low-priced sushi chains has declined, “gourmet” sushi chains with a slightly higher price range are drawing lines every day. Kaiten Sushi Triton, a sushi chain from Hokkaido, and Kanazawa Maimon Sushi from Ishikawa Prefecture have opened restaurants at Parco in Shibuya, Tokyo, and at the Aeon Mall in Makuhari Shin Toshin (Chiba Prefecture).

Both of these sushi restaurants have the impression that they are good at creative sushi using local ingredients. When the revolving lanes are removed and sushi restaurants become “non-turners,” like Sushizammai and Tsukiji Sushiyoshi, chains with this kind of individuality will probably gain popularity,” says Nagata.

However, Triton’s average price per customer is around 3,000 yen per meal. It seems too expensive for everyday use. It seems that another type of business has the potential to replace the low-cost conveyor-belt sushi chains.

Mr. Miwa, the aforementioned sushi chef, says, “One that I am looking at is the ‘stand-up eating place.

We are focusing on ‘tachi-eater sushi’ and ‘sushi izakaya. Tachikiri-zushi is easy to open even for small tenants in the city center, and there is an atmosphere in which even a single male customer can easily enter. It is also popular for its good cost performance, and even if there is a line, the turnover is fast, so it is easy to wait. Sushi izakayas with a full lineup of alcohol, such as “Sushi, Sake, and Side Dishes Sugitama” and “Yatai Zushi,” another Sushiro business model, are also growing. Now that Corona is settling down, there is room for growth for sushi izakayas that can cover the high cost ratio of sushi with alcoholic beverages.”

Will Hamazushi and Genki Sushi eclipse the champions, or will they go for a different type of business? The “battle without honor and humanity” among conveyor-belt sushi chains has entered a new chapter.

From the April 21-28, 2023 issue of “FRIDAY