Taisei Hikage is fighting a losing battle at his Tokyo ramen shop, not to attract customers, but to limit the price he charges for Japan’s national comfort food in the face of relentlessly rising ingredient prices and fuel.
Since opening his shop in the west of the capital a year and a half ago, Hikage, 26, has increased the prices of his menus three times but still struggles with rising costs. Its best-selling “Special Ramen” is up 47 percent, for 1,250 yen ($8).
“Traditionally, ramen shops were supposed to offer something cheap and tasty,” Hikage said between stirring large pots of broth and blanching the noodles. “It’s no longer cheap food for the masses.”
The problems facing ramen vendors – a record number of merchants are expected to go bankrupt this year – reflect a cost-of-living crisis that has become a top issue for voters in Sunday’s general election in Japan.
The ruling Liberal Democratic Party, led by Prime Minister Shigeru Ishiba, describes itself ramen fanatic, and opposition parties have promised various measures to offset rising costs for businesses and households.
These efforts to control rising prices, in a country emerging from decades of deflation, could swing an election where opinion polls show the LDP – which ruled Japan for most of the post-war period – could lose its parliamentary majority.
Hikage, who said he would be too busy working at his restaurant to vote, hopes the winners will consider introducing subsidies to offset rising costs.
His award-winning noodles remain in high demand despite repeated price hikes, with long queues outside his store day and night.
Some of its competitors aren’t faring as well: 49 ramen shop operators with debts of at least 10 million yen filed for bankruptcy in the first seven months of the year, on track to surpass the 2020 record of 54 bankruptcies, according to the credit research firm. Teikoku Data Bank.
“Eliminated”
Hikage prides itself on using mostly local ingredients, but many ramen restaurants rely heavily on imported materials, like flour to make noodles.
Japanese import costs have risen as the yen has fallen. The currency hit its lowest level in 34 years against the dollar this year and has struggled to regain ground. Rising energy and grain prices, triggered by Russia’s war in Ukraine, and rising labor costs are also driving up costs for ramen shops.
The plight of Japan’s ramen shops illustrates a broader trend of businesses failing to adapt in the age of inflation.
Nationwide bankruptcies in the six months to September jumped 18.6% from the same period last year to 4,990 cases, a record number driven by inflation, a indicated the Teikoku database.
“Just like ramen shops, businesses with high-demand goods and services transfer their costs to product prices and see increased sales. Those that struggle to pass on the higher costs are eliminated,” said l chief economist of the Dai-ichi Life Research Institute. Toshihiro Nagahama.
But Nagahama said the tendency of politicians to offer support measures to win votes could be counterproductive in the long term.
“If too many ‘zombie’ companies, or companies unable to increase productivity or wages, remain alive, they could pose a drag on the Japanese economy,” he said.
For now, Hikage said he will focus on serving quality food and hopes the election can bring some sort of positive change.
“Our task now is to endure this and focus on offering something delicious, with our heads down in front of customers,” he said.
