With consumer spending in a slump, many izakaya operators are slashing labor to cut prices.
Watami Co. is planning to open a chain of 10 budget izakaya pubs by the end of the year, with 70-80 percent of the menu priced at 250 yen.
"Since last summer, customers have been quickly tightening their purse strings," said Yutaka Kuwahara, the company's president. "The market is going to continue shrinking, slowly but surely."
At the budget Watami, customers use a digital menu to place orders at their table before picking up the orders at the kitchen themselves.
By adopting this system, Watami will cut labor costs, thereby making the cheaper menu a reality. At the regularly priced Watami izakaya, the average patron spends 2,600 yen. The company predicts that figure will be as little as 1,800 yen for customers at the budget izakaya.
In May, Colowide Co., which operates the Amataro izakaya chain, cut prices on 40 percent of its menu to under 400 yen, with many dishes costing as little as 299 yen. The company reduced its prices by preparing its food at its factory to lessen the burden on each kitchen.
"We also want to attract customers who don't spend much," said Shinichiro Hayakawa, head of operations.
Sanko Marketing Foods Co. has been leading this low-price competition since May 2009 by pricing all items at its izakaya pubs--such as Toho-kenbun-roku and Tsuki-no-Shizuku--at 270 yen.
Izakaya sales dropped 6.6 percent in April from the same month last year, marking the 16th straight month of decline.
With fewer people visiting izakaya after work and many people opting to eat-in--plus to the fact that fewer younger people drink--this price battle seems to have just begun.
http://www.yomiuri.co.jp/dy/business/T100603004657.htm
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