Glad that I read your piece on a full stomach! Just kidding. Are there any bright spots (e.g., kaiten sushi chains) that are holding their own in the midst of this challenging environment? If so, why?
Haha, yes, strategically releasing this piece around lunchtime may have indeed been a deliberate choice!
Indeed, several restaurant segments are flourishing in this new environment:
- Entertainment Dining: Establishments with engaging themes, such as Ninja or Sumo Wrestling, cater specifically to tourists and are experiencing greater success than ever.
- Premium and Niche Dining: Often regarded as foreign cuisine in Japan, restaurants like salad bars, pizzerias, or Mexican eateries are relatively novel here and can demand significant premiums. Their perception as trendy and less constrained by traditional Japanese culinary expectations also helps attract a broader workforce.
- Kaiten Sushi: Major chains like Kura Sushi and Sushi-ro are performing exceptionally well. After reading the latest financial reports from Kura Sushi, the company is successfully navigating price hikes and labor shortages through strategies such as dynamic pricing, automation, and employing foreign staff in non-customer-facing roles. They've also expanded their menu to include items less sensitive to price fluctuations, like additional dessert options and exotic sushi varieties, and utilize tablet-based menus to adjust prices daily for items like tuna and salmon sushi.
Overall, it appears that restaurants able to capitalize on the tourism boom, leverage economies of scale and technology to minimize labor needs, and possess more pricing flexibility due to their novelty in the Japanese market are prospering, while others face challenges.
Thank you for the detailed explanation. Your overall assessment makes a lot of sense. I suppose, as you pointed out in the original article, the restaurants that barely made it through Covid but are dependent on bank loans that are now subject to slightly higher interest rates may give up rather than try to salvage margins by implementing price increases. In keeping with the theme of this article, it's time to trim the fat!
An interesting write-up. Thank you. I was meaning to reply to your message re: where I find a stock to write about. I just read some publications such as Nikkei. During the reporting season, which we are in now, i keep an eye out on the companies which report good results. How about you? where do you find a topic to write on? Sorry for asking a question in the comment section.
Firstly, I stay updated by following Japan's major news outlets like Diamond Online, Nikkei, and Bloomberg Japan.
Secondly, I use a screener inspired by Joel Greenblatt's Magic Formula and insights from my Swedish investment heroes at Kvalitetsaktiepodden to identify intriguing, lesser-known companies.
Thirdly, I have a knack for spotting trends and I leverage this to explore sectors that catch my interest, particularly in tech and gaming.
I'm genuinely interested in your podcast and think it has great potential for further refinement. I’d be honored to discuss potential collaborations. Would you like to continue this conversation?
Thanks for your reply. I use magic formula for my US stock portfolio.
My podcast and website (JapaneseIPO.com) require significant refinement. As you can see, my current follower base is quite small.. Considering this limitation, what types of collaborations do you think would be feasible? I must mention that my financial resources for contributions are somewhat limited.
Glad that I read your piece on a full stomach! Just kidding. Are there any bright spots (e.g., kaiten sushi chains) that are holding their own in the midst of this challenging environment? If so, why?
Hi Mark-san!
Haha, yes, strategically releasing this piece around lunchtime may have indeed been a deliberate choice!
Indeed, several restaurant segments are flourishing in this new environment:
- Entertainment Dining: Establishments with engaging themes, such as Ninja or Sumo Wrestling, cater specifically to tourists and are experiencing greater success than ever.
- Premium and Niche Dining: Often regarded as foreign cuisine in Japan, restaurants like salad bars, pizzerias, or Mexican eateries are relatively novel here and can demand significant premiums. Their perception as trendy and less constrained by traditional Japanese culinary expectations also helps attract a broader workforce.
- Kaiten Sushi: Major chains like Kura Sushi and Sushi-ro are performing exceptionally well. After reading the latest financial reports from Kura Sushi, the company is successfully navigating price hikes and labor shortages through strategies such as dynamic pricing, automation, and employing foreign staff in non-customer-facing roles. They've also expanded their menu to include items less sensitive to price fluctuations, like additional dessert options and exotic sushi varieties, and utilize tablet-based menus to adjust prices daily for items like tuna and salmon sushi.
Overall, it appears that restaurants able to capitalize on the tourism boom, leverage economies of scale and technology to minimize labor needs, and possess more pricing flexibility due to their novelty in the Japanese market are prospering, while others face challenges.
Thank you for the detailed explanation. Your overall assessment makes a lot of sense. I suppose, as you pointed out in the original article, the restaurants that barely made it through Covid but are dependent on bank loans that are now subject to slightly higher interest rates may give up rather than try to salvage margins by implementing price increases. In keeping with the theme of this article, it's time to trim the fat!
An interesting write-up. Thank you. I was meaning to reply to your message re: where I find a stock to write about. I just read some publications such as Nikkei. During the reporting season, which we are in now, i keep an eye out on the companies which report good results. How about you? where do you find a topic to write on? Sorry for asking a question in the comment section.
Thank you!
Firstly, I stay updated by following Japan's major news outlets like Diamond Online, Nikkei, and Bloomberg Japan.
Secondly, I use a screener inspired by Joel Greenblatt's Magic Formula and insights from my Swedish investment heroes at Kvalitetsaktiepodden to identify intriguing, lesser-known companies.
Thirdly, I have a knack for spotting trends and I leverage this to explore sectors that catch my interest, particularly in tech and gaming.
I'm genuinely interested in your podcast and think it has great potential for further refinement. I’d be honored to discuss potential collaborations. Would you like to continue this conversation?
Thanks for your reply. I use magic formula for my US stock portfolio.
My podcast and website (JapaneseIPO.com) require significant refinement. As you can see, my current follower base is quite small.. Considering this limitation, what types of collaborations do you think would be feasible? I must mention that my financial resources for contributions are somewhat limited.
Great! Let's continue this conversation on Substack Message.