Gyudon Chains: A Study of Reiwa’s “Three-way Battle” Beyond “Good, Cheap, and Fast

Beyond “Good, Cheap, and Fast

The “old powerhouse” in dire straits announced a new product, an “ostrich rice bowl,” in a desperate attempt to save the company.

On August 28, Noya Holdings, which operates the Noya beef bowl chain, held a presentation on its new business in Tokyo. The event was attended by freelance announcer Ugaki Misato (33), who tasted the “ostrich rice bowl” (1,683 yen), which was launched on the same day at some stores.

This item was offered at about 400 Noya “Cooking & Comfort” style restaurants (a.k.a. KURONOYA), 49 of which are located in Tokyo, and a limited number of 20 servings per day. The product uses ostrich raised by subsidiary “Speedia” and has a crisp roast beef-like flavor. Noya positions ostrich as the “fourth meat” following beef, pork, and chicken, and aims to popularize it in the future,” said food journalist Junnosuke Nagahama.

Ostrich meat is low in calories and fat, rich in iron and vitamin B, and effective in relieving fatigue and preventing vascular aging.

While the new, high-impact product is attracting attention, B-grade gourmet explorer Yagyu Kyubei, who has worked part-time at Noya, is uneasy about the move.

He says, “The number of stores is limited and the quantity is limited, so it is difficult to eat it in the first place. Personally, I don’t think I would want to go out of my way to find a store that carries it and pay 1,700 yen to eat it. In the 1990s, Noya opened a store called “Noya USA” and offered a beef bowl in a styrofoam container called “Beef Bowl,” but it did not catch on at all and the company quickly withdrew from the market. The current ostrich bowl will probably suffer a similar fate. It would not be surprising if it is perceived as a lost cause.

The restaurant industry is currently undergoing a major transformation. Against the backdrop of a weak yen and global inflation, costs for raw materials, transportation, labor, and all other expenses are increasing, and this is weighing heavily on the beef bowl chains, whose biggest selling point is cheapness.

In fact, in July this year, Noya raised the price of a regular beef bowl from 468 yen to 498 yen. The harmony of the sauce made with white wine and the juicy, fatty meat is exquisite, and the quality of Noya’s beef bowls is satisfactory even at one coin, but it still seems expensive considering that a bowl of beef bowls cost 280 yen about 10 years ago.

Noya was the only one of the three companies to show a commitment to face-to-face customer service without using meal ticket machines or touch panels. Recently, however, it has begun to introduce touch-panel tablets at some of its restaurants in order to relieve labor shortages and save on labor costs. In the past, customers could simply order “Nami to Tamago” as soon as they sat down, but now they have to tap “Start Ordering,” then tap “View All Menus” on the next screen, select the type of beef bowl, and then tap “Side Menu” to choose the eggs. Older customers who have been regulars for a long time and first-time customers will be confused. With the price increase, Noya is losing its familiar catchphrases of ‘cheap’ and ‘fast.

(The same applies to Noya.) “Going beyond ‘tasty, cheap, and fast,'” says Mr. Kato.

Noya, which has 1,240 outlets and ranks second in the industry with annual sales of 126.4 billion yen, has mirrored the realities of the industry with the introduction of tablet terminals and the challenge of serving ostrich bowls.

Teishoku and Late-Night Fares Are Key

In this environment, Matsuya (1,057 stores, annual sales of 98.5 billion yen), the third largest restaurant chain in the industry, is gaining momentum. While Noya’s same-store customer counts in FY2012 were down 1.2%-1.7% from the previous year, Matsuya’s were up 7-13.3%. If this trend continues, it may only be a matter of time before Matsuya overtakes Noya in the battle for second place.

Matsuya’s beef rice is made with thick, crispy onions and less fatty meat. The sauce is sweeter than that of other companies. Although the price of a regular dish was raised from 400 yen to 430 yen in July of this year, the restaurant has many loyal fans.

However, it is the higher-priced set menus that generate the most profit. Matsuya has always been a machi-chuka restaurant, so we are confident in the quality of our set menus. For example, the “Umatoma hamburger steak set meal” (830 yen), available only during the summer, is so popular that we often run out of stock. The “Kalbi Yakiniku Teishoku” (880 yen) is also frequently served. It takes time to serve it, but you can find it at …….” (A staff member at a Matsuya restaurant in Tokyo)

Teishoku is an indispensable product for Matsuya, as it can be easily arranged and limited-time items can be introduced one after another. Food analyst Takao Shigemori comments.

The “Shkumerli Nabe Set Meal,” which was first introduced in January 2008 and is an adaptation of a local Georgian dish, was an explosive hit, and the Georgian Ambassador to Japan actually visited the restaurant and ate it, which was broadcast on news programs.

In April of this year, we were approached by the Polish Embassy and sold the “Polish-style Mielonny hamburger steak set meal,” and in August, with the endorsement of the Lithuanian Ambassador, the “Lithuanian-style hamburger steak with white sauce set meal” was sold and received a favorable response. These are popular as ″gaikoku teishoku″ and are products that demonstrate Matsuya’s presence and profitability with higher unit prices than beef bowls.”

Sukiya, the champion with 1,955 stores in Japan and annual sales of 265.3 billion yen, has raised the price of its gyudon by 30 yen, the same as Matsuya.

However, this is inadequate considering the ever-rising prices and labor costs. Not wanting to give itself a chance to fall from the throne, Sukiya introduced a late-night fee.

The price for new orders placed between 10 p.m. and 5 a.m. is 7% higher than the price charged in the previous year. This alone might have driven customers away, but Sukiya has increased product variations in the hope that it will also have the effect of camouflaging the price increase. The company introduced a series of new products, including the “Yangnyom Cheese Gyudon” (620 yen), featuring Satomi Ishihara (37) in a commercial, the health-conscious “Mekabu Okra Gyudon” (620 yen), and the “Charcoal Yakitori Bowl” (590 yen). These new products have created a buzz, and the impact of price hikes and late-night charges has been lessened, resulting in an increase in customer traffic,” said Mitsuhiko Suda, a producer in the restaurant industry.

Sukiya’s same-store customer counts from April to August were down 0.5% to 4.9% y/y, and although not as high as Matsuya’s, the company is doing well. The richly varied product lineup is supported by the distribution network of Zensho Holdings, a trillion yen company that operates Sukiya.

The company shares suppliers with Hamazushi and other restaurants in the same group. We are less concerned about procurement of ingredients, and it is easier to develop menus that take advantage of our cooking know-how,” said Nagahama.

The three companies are determined to raise prices across the board and increase profits in areas other than beef bowls. This trend is common among the three companies.

Matsuya’s “Negi-Shio Pork Kalbi-don” is now priced at 590 yen, 160 yen higher than the price of “Gyumeshi” (beef bowl). Sukiya’s “Umidashi Torisoborodon” used to be more than 100 yen cheaper than beef bowl, but now it is 60 yen higher at 490 yen. The strategy is to raise the price of conspicuous beef bowls sparingly and to raise the price of less conspicuous products significantly.

More choices, higher unit prices. The winner of the battle over price hikes in the beef bowl industry will be the one who stands at the top of the new era, as the price of a regular bowl of beef bowl is about to exceed the one-coin mark.

From the September 27 and October 4, 2024 combined issue of FRIDAY