Why Japan's 'wandering salarymen' spending boom has been a bust

Jul 09, 2019 | News On Japan

Jul 09, 2019 (Nikkei) - Budget restaurant chains in Japan that are struggling with sluggish sales are wondering: Where are all the "wandering salarymen"?

The Japanese government's work-style reforms, designed to give corporate employees more flexibility and reduce overtime, were widely expected to help affordable eateries. It seemed logical. Workers would pour out of offices earlier, and with extra free time on their hands, they would be more inclined to wander around and pop into standing bars, izakaya Japanese-style pubs and other casual establishments on the way home.

Yet, ramen noodle chain operator Hiday Hidaka left market watchers scratching their heads with its lackluster latest earnings. Customer traffic from March through May fell 3% to 5%, hurting the company's quarterly results -- and hinting at deeper changes in Japanese consumer habits.

Many thought the operator's Hidakaya chain had a competitive advantage as a place to grab a quick drink and meal, since izakaya tend to be more expensive. To an extent, the noodle shops may still be feeling the effects of price hikes implemented in April 2018. But this past March, the chain tried to lure in customers by cutting the price of the first mug of beer to 290 yen ($2.70) from 330 yen. It has little to show for it.

"Though the hours of overtime worked by employees in this country have indeed declined," a company spokesperson said, "overtime pay may have decreased as well."

Hiday Hidaka is not alone. Yoshinoya Holdings, known for its chain of gyudon beef-on-rice restaurants, has not received much help from the work reforms either. The company has been pushing pub-style menu options to pull people in for after-work drinks, but although this generated a buzz for a while, the effects appear to have ebbed.

Customer flows are also weak at Saizeriya, which runs budget Italian restaurants. Like Hidakaya and Yoshinoya, Saizeriya had been counting on newly liberated workers coming in for a few quick, cheap drinks and a meal.

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