Why Japan’s Ramen Restaurants Keep Going Out of Business

These days, there are few things regarded as quintessentially Japanese as ramen. But as costs soar, ramen shops are having a hard time staying afloat. Some say they feel there’s nothing they can do about it.

How much does ramen in Japan cost?

There are over 23,000 ramen shops located throughout Japan. Tokyo Metropolis has the most, with 2,134 as of October 2023. Hokkaido ranks second as the prefecture with the most ramen shops at 1,241. So it’s not likely that ramen will disappear from the Japanese restaurant landscape anytime soon.

However, in a recent piece, Kansai TV raised a troubling data point. After weathering the pandemic with only 40-some closures a year, ramen shop bankruptcies and closures grew at an abnormal pace in 2023. 74 shops closed as opposed to only 43 in 2022.

The culprit? The combination of the weak yen and rising prices brought about by international events. In the past year, price hikes have hit everything from eggs to pork. Major chains have been raising their prices as well to offset rising wholesale costs. (And, let’s be honest, to pad out their profits.)

One obvious solution to this challenge: raise prices. However, in Japan, that’s easier said than done.

With so many people working long hours and wages remaining stagnant for decades, cheap restaurant eats have been a cornerstone of Japanese working life for years. Ramen, in particular, has maintained a sub-1000 yen (USD $$6.70 and rapidly falling at current exchange rates) price point for decades. According to the site Ragura, which supports ramen shops in Shizuoka Prefecture, the average cost per bowl in 2023 is 860 yen (USD $5.76).

(By the way, the most expensive bowl of ramen listed by Ragura is 2,420 yen, or USD $16.20. I believe I know where you can buy it, too.)

Why shops say they can’t budge on pricing

That low cost has created what ramen shop owners and news media term the “1000 yen wall” (１０００円の壁; sen-en no kabe). Some shop owners say that, if they raise prices above 1000 yen, they’ll lose so many customers to their competition that they’ll go out of busines anyhow.

Kansai TV interviewed one shop owner in Nishinomiya, Hyogo Prefecture, whose shop, Nishinomiya Ramen, had been in business for over 25 years. Lately, he’s been struggling with dramatic wholesale price hikes. For example, the char siu (pork fillet) he uses in his ramen has gone up in the past five years from 600 yen a kilogram to 900 yen – a 1.5x increase.

However, the store’s owner said he couldn’t raise prices beyond 1000 yen a bowl for fear of driving away customers. As a result, Nishinomiya Ramen closed its doors in January.

Writing about the 1000 yen problem in 2022, food journalist Yamaji Rikiya says one reason for this might be that older people – who are increasingly making up more of Japan’s population – are used to the days of the “one-coin meal”. I.e., they remember when they could buy a full plate or bowl for a single 500 yen coin (or less).

Yamaji also argues that the “affordable ramen” mindset isn’t just prevalent among customers but shopkeepers as well. He says many he’s talked to want to keep the price below 1000 yen to preserve ramen’s status as “the people’s food”.

“There are a not insignificant number of shopowners who care about their customer’s satisfaction above their own profits,” he writes.

Some shops are (successfully) climbing the 1000 yen wall

Not everyone in Japan is allergic to raising prices. McDonald’s Japan has been raising prices steadily in the past year. The result? A 26.2% YoY rise in profit.

A small ramen shop or chain obviously doesn’t have the economic power of a large corporation like McDonald’s. But some ramen shop owners say they haven’t had a problem raising the price of their products above 1000 yen.

Kai Kenta, the owner of Hakata Ramen Dev-chan in Takanobana, Tokyo, says his store does just fine charging an average 1300 yen ($8.71) a bowl. Customers agree: the store’s relatively strong 3.70-star rating on Japanese restaurant rating site Tabelog makes it one of the top 5,000 ramen joints in Japan. (On Tabelog, 97% of stores score a 3.5 star or below; only 3% of stores score between a 3.5 and a 3.99 rating.)

Kai also cited Ramen Gantetsu in Nishiwaseda (Tabelog: 3.78) and Ramen Break Beats in Meguro (Tabelog: 3.91) as other ramen restaurants breaking the 1000 yen barrier. He says that, contrary to many ramen shop owner’s fears, the price hike offsets any loss of customers. The increased profits enable store owners to invest in quality ingredients and good staff. And that, in turn, attracts more customers.

Hopefully, more shop owners – and customers – learn to cross the 1,000 yen wall. At the rate prices are increasing, the future of ramen in Japan may depend on it.

Sources

ラーメン店の倒産が過去最多　物価高に円安で値上げは限界　「1杯1000円の壁」が経営苦しめる. 8Kanneru

ラーメン店の倒産最多で注目「1000円の壁」　それでも「1杯1000円以上」で繁盛する店はある. JCast News

ラーメン店が多い都道府県ランキング！ 2位「北海道」、1位は？【2023年11月】. AllAbout

ラーメン価格の平均値. Ragumi

ラーメンが「1,000円の壁」を超えられない２つの理由とは？Yahoo! News JP