Sales of Machida and Yamaokaya ramen stay strong despite pandemic
Nikkei -- Jan 05
Ramen chain store operators Gift and Maruchiyo Yamaokaya have managed to keep 2020 sales at roughly the same level as a year ago, even as the COVID-19 pandemic hammered the industry, by adapting quickly to the deteriorating business environment, company leaders said.

Both credited their success to these strategies: Gift launched a home delivery service ahead of rivals and Yamaokaya continued to operate around the clock while others were cutting business hours.

Gift's success can be seen in the number of Uber Eats deliveries that were leaving its popular 111 Machida Shoten restaurants. Gift said recently that same-store sales were equal to 95% to 97% of 2019 levels in each of the three months from September.

By contrast, other major listed ramen chain operators were reporting sales declines of up to around 30% in the same period. Sales fell to 69% to 76% of 2019 levels at Chikaranomoto Holdings which operates the "Ippudo" chain, while sales were equal to 81% to 87% at Hiday Hidaka. Kourakuen Holdings saw sales drop to 78% to 87%, though it posted a gain in October due to an exceptionally low comparison base because of typhoon damage in 2019.

Research company Teikoku Databank said the number of bankruptcies in the industry in 2020 will be the largest in two decades. This is after 34 ramen restaurants, including well-known chains such as Rokkakuya, went belly up in the January-September period.

As such, Gift and Yamaokaya have done exceptionally well. Against a backdrop of the government's "stay-at-home" advice, 54 of the restaurants under Gift's direct management, or more than half, started delivery services in May. Hiday Hidaka's chain, which is larger than that of Gift, by contrast only introduced that service at about 20% of its outlets.

Another reason for Gift's success is location -- 60% of its restaurants are in residential areas or are roadside outlets. Such locations make it easier to serve customers who are stuck at home or do not want to travel far because of the pandemic.

News source: Nikkei
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