There has been a rush to raise prices due to macroeconomic factors such as the weak yen, soaring wheat prices, and high oil prices. While every food manufacturer is announcing price hikes and hitting the pocketbooks of consumers who have been cooled by the COVID-19 crisis, the founder of Saizeriya, Chairman Yasuhiko Masagaki, has declared in an interview with NewsPicks that he will &#8220;never raise prices.
As the title conveys, the article you are about to read is about the problems with this Saizeriya strategy. But before I go any further, let me say that Saizeriya is without a doubt a winner in the Japanese restaurant industry, and at the same time, it is known for its extremely unique management in the industry.
It has first-rate management, has a good sense of how the world is changing with the COVID-19 crisis, and is performing well. However, from an outsider&#8217;s perspective, there are some flaws that inevitably bother me, and perhaps they are also flaws that Saizeriya is not good at.
As a management critic, I decided to write about it in this article.
<figure id="attachment_251220" class="wp-caption alignnone" style="width: 4589px;" aria-describedby="caption-attachment-251220"><a href="#" data-ident_hash="4e913af2"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2022/06/aflo_105492432.jpg" alt=""></a><figcaption id="caption-attachment-251220" class="wp-caption-text">Saizeriya&#8221; has first-rate management, has a good read on the changes in the world with the COVID-19 crisis, and is performing well, but&#8230; (Photo: AFLO)</figcaption></figure>
Saizeriya&#8217;s management team is known for having many science majors, and the company is characterized by its science-oriented management. For example, Saizeriya&#8217;s mops and aisles are the same width and length because they can be mopped in one go. The fried food menu popular with children is not available at Saizeriya because the time and effort required to maintain the fryer is a greater disadvantage. Saizeriya&#8217;s good corporate culture is to think scientifically and logically and make decisions based on that.
The decision by Saizeriya not to raise prices in a situation where there is a rush to raise prices is based on this logic, according to Chairman Masagaki.
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Starting from Saizeriya&#8217;s management philosophy, &#8220;A good product must be of appropriate price and quality for the eater,&#8221; and &#8220;A product that sells is a good product.
And now, if we think about the eaters, we must not raise prices because the world is in great trouble. The reason is that the world is in great trouble right now. Wages are not rising, prices are rising, and customers are suffering. What will happen to customers if Saizeriya raises prices? They will be in trouble. That is why Saizeriya does not raise prices. This is the logic behind Chairman Masagaki&#8217;s declaration not to raise prices.
Nevertheless, with raw material costs rising across the board and utility costs such as electricity and gas skyrocketing, the logic goes something like this: &#8220;If it&#8217;s really good value, how can we absorb the cost? It is &#8220;If the prices are really good, customers will increase. As a result, new stores will be needed. If the number of stores increases, the cost increase can be easily absorbed. As a result, profits will be generated.
Incidentally, Saizeriya is known for its relatively good treatment of full-time employees in the restaurant industry. The average age of full-time employees is 38 years old, and the average annual salary is 5.52 million yen, which is a salary level that is sufficient to live decently in this day and age.
Saizeru has a menu that is popular with consumers, has a creative way to offer it at an extremely low price, is growing in business, and treats its full-time employees well. In fact, there is a definite weakness in this seemingly top-notch Saizeriya.
That is its reputation among part-time workers.
There is a word-of-mouth site called &#8220;Minbun&#8221; that people who work part-time for a living use as a reference. In the category of part-time jobs at family restaurants, Saizeriya appears to be in a good position at first glance, ranking 6th among the 27 chains that have been evaluated by word of mouth.
However, the majority of chains with &#8220;bad&#8221; reviews in the restaurant part time job market have only a few chains with good reviews from the part time worker&#8217;s point of view.
The top reviewed chains in the Minpreview are McDonald&#8217;s with a 3.36 rating, Komeda Coffee Shop with a 3.35 rating, and Akindo Sushiro with a 3.34 rating. Those who know the industry can tell from this list that these three companies are certainly first-rate when it comes to part-time management.
As for Minpaku, it has a reputation for being a site that tends to attract bad reviews, but if you look at the contents, at least the facts are written. Interestingly, just as with the evaluations on Eating Log, the chains that get 3 points are those that are good in terms of people management, and the lesser chains tend to get 2 points, around 2.7 to 2.9. And Saizeriya&#8217;s part time employee review score is 2.89.
The overall trend in the distribution of restaurant chain reviews in the Minpreview is that only the top 10-20% of chains are &#8220;first-rate&#8221; and the rest are &#8220;second-rate,&#8221; and Saizeriya belongs to that &#8220;second-rate group. So why does Saizeriya have a bad word-of-mouth reputation among part-time workers? Reading from the vast number of word of mouth, the reputation is consistent. They say, &#8220;The quality of full-time employees is poor.
Whether or not you can work there comfortably as a part-timer depends on the personality of the employee, or manager, and the hit or miss is quite large. According to word of mouth from people who have worked at several stores, only about 20% of all stores have good managers who are skilled at managing people. In general, at stores that are considered outliers, there are more descriptions of power harassment by part-timers, such as, &#8220;When it gets busy, the anger becomes unreasonable. And it is also written that &#8220;the company basically does nothing when it comes to people problems.
From reading the posts, it appears that work at Saizeriya is busier than at other chains. That is not surprising since they are all thriving restaurants. The store operation manuals have been scientifically refined to provide uniform service in most of the stores, even if the management of people is poor.
On the other hand, the satisfaction of part-time workers with their supervisors is not uniform but skewed toward the bad side. Workplace problems caused by variations in supervisor qualifications may be overlooked in science-based management. This is because in science-based problem solving, it is very important to define the outer frame of the problem, and because there is an outer frame, the optimal solution is sought within that range. And what does not fit within that framework is not likely to be recognized as a problem.
Suppose we define the problem as &#8220;providing good food at a reasonable price to customers,&#8221; and set employees, stores, partner companies, etc. within the scope of solving that problem. In defining the problem in this way, measures such as &#8220;increasing productivity,&#8221; &#8220;raising the quality of ingredients by growing them on the company&#8217;s own farm,&#8221; and &#8220;returning profits to full-time employees as they increase&#8221; are created.
On the other hand, if part-time workers are not included in the scope of the problem setting, they will not be recognized as a problem, and no profit will be allocated to them. In fact, Saizeriya&#8217;s &#8220;Declaration of No Price Raise&#8221; does not include any mention of raising wages for part-time workers.
<figure id="attachment_251221" class="wp-caption alignnone" style="width: 2000px;" aria-describedby="caption-attachment-251221"><a href="#" data-ident_hash="bcafbaaf"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2022/06/2_IMG_0674.jpg" alt=""></a><figcaption id="caption-attachment-251221" class="wp-caption-text">A job advertisement posted at a hamburger store in Los Angeles, USA. The minimum hourly wage starts at $17.25&#8230;at 136 yen to the dollar, that&#8217;s about 2,300 yen.</figcaption></figure>
According to word of mouth, Saizeriya&#8217;s part-time hourly wage level is close to the minimum wage. The minimum wage in Tokyo is 1041 yen, but the advertisement for Saizeriya&#8217;s Kichijoji, Tokyo location states that the hourly wage for part-time workers is between 1061 yen and 1261 yen.
On the other hand, McDonald&#8217;s, which Chairman Masagaki of Saizeriya often cites as a &#8220;tasty product&#8221; (this is a management policy I heard about in the 1980s when I was working part-time), had a conscious strategy to &#8220;turn part-time workers into McDonald&#8217;s fans.
As management explained at the time, McDonald&#8217;s is the first employer in life and generates the largest employment in the world, plus the crew eventually graduates from McDonald&#8217;s and enters the workforce, becoming the future McDonald&#8217;s customer base. So he says that turning those former crew members into McDonald&#8217;s fans is critical to the future of the business.
If word of mouth is to be believed, a small number of full-time employees at Saizeriya will turn the restaurant around trying to maximize only the productivity of the day. Part-time workers&#8217; voices cannot be read from numbers such as the number of customers, customer spend, or profits at a store. In Japan, part-time workers move to another chain for a different environment after an average of one year of service. In reality, there is no paradise anywhere. The structure of the country is such that vulnerable non-regular workers can be hired at near minimum wage and replaced.
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In fact, the rate of wage increases this spring has been higher than the rate of inflation for households headed by full-time employees of large corporations. The &#8220;wages are not rising and prices of goods are suffering&#8221; is mainly a problem of the &#8220;socially vulnerable&#8221; such as non-regular workers, who account for 40% of the total, and are in part supported by such a class of consumers.
While Saizeriya has grown into a huge company supported by these consumers, its highly paid regular employees are regarded by word of mouth as &#8220;second-rate&#8221; when it comes to managing the socially vulnerable, and if it is supported by the work of the low-paid &#8220;first-rate vulnerable&#8221; that allows it to operate without raising prices, then this is a contradiction in terms for Saizeriya, is it not? This is the contradiction of Saizeriya.
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 Management strategy consultant. Graduated from the University of Tokyo with a bachelor's degree in engineering. After working for Boston Consulting Group, he became independent in 2003. He is an expert in business strategy and future forecasting. He is active as an economic commentator in various fields, including the media. Author of "The Future of Inequality and Class" and "Job Disappearance: What We Can Do Now to Survive the Age of AI" (Kodansha), "Nihon Keizai: Book of Revival" (PHP Research Institute), "Strategic Thinking Training" series (Nikkei Publishing Inc.), and others. The latter is a bestseller with a cumulative total of over 200,000 minutes.

 Takahiro Suzuki

 The company is running a first-rate business, has a good sense of how the world is changing with the COVID-19 crisis, and is doing well. However, from an outsider's perspective, there is a flaw that inevitably bothers me, and perhaps it is also a flaw that Saizeriya is not good at.

Saizeriya Founder’s “One Word Missing” in Declaration of “No Price Raise

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