Inflation has come for one of Japan’s most beloved cheap eats: Ramen
TOKYO - Ramen is an affordable comfort dish in Japan, where a bowl of warm noodles in hearty broth rarely costs more than 1,000 yen, or about $6.80. It’s a quick and reliable meal during a work lunch break, for teenagers hungry after school and salarymen taking a late train home.
But as Japan experiences inflation after decades of falling or stagnant prices, one of the country’s favorite cheap meals is taking a hit. Ramen shops are closing at a record pace this year, as owners face the dilemma of raising their prices beyond the “1,000-yen wall” to cope with rising costs or shutting down.
As of July, 49 ramen shops filed for bankruptcy, on pace to set a record for most closures in a single year, according to Teikoku Databank, a corporate research company based in Tokyo. The cost of ingredients, labor and electricity making ramen has increased by 10 percent over three years, the company found.
“Prices have been rising over the years, but the last three years or so have been unbelievable,” said Tetsuya Kaneko, 44, who last year raised his price by 50 yen to 1,000 yen for a standard bowl at Mendokoro Isshou in western Tokyo. “I think everyone in the industry is struggling.”
Of course, ramen culture in Japan isn’t going anywhere. The 49 bankruptcies represent a fraction of the 21,000-plus ramen eateries in Japan. Even on a humid 95-degree day, aficionados queued outside ramen shops at lunch time for a steaming bowl.
Each region of Japan touts its own style of ramen from noodle texture to ingredients in the broth, which includes creamy pork bone tonkotsu in the south, sweet corn and butter miso in the north, and even the tsukemen, a dipping ramen with noodles served separately from broth made of chicken, pork and fish.
Yet the increase in closures this year underscores larger economic trends in Japan: Inflation is rising after almost three “lost decades” of economic stagnation; the yen, although it has risen slightly in the past month, remains stubbornly weak; and energy prices have risen since the Russian invasion of Ukraine.
Although wages are rising at the fastest pace in three decades, they are not keeping up with inflation, making people feel like they’re getting poorer.
“The ramen shop example is a really good one [of the economic trends] because they’re struggling to pass on the increase in the cost to the final consumers,” said Norihiro Yamaguchi, senior Japan economist at Oxford Economics. “Before 2022, consumers were hesitant to see any kind of price hikes, whether it’s food, or rent, or whatever. But [now] … they have to accept the increase in their living costs.”
Such trends in the world’s fourth-largest economy gained global attention earlier this month, when the central bank unexpectedly raised interest rates to try to contain inflationary pressures. Soon after, Japanese stock markets took their biggest daily dive since 1987, sending shock waves through global markets and highlighting the weakness of the yen.
The Japanese currency has lost more than 40 percent of its value against the dollar over the past five years, attracting investors who want to take advantage of the weak yen. It has made imports into resource-poor Japan dramatically more expensive, compounding energy shortages following Russia’s invasion of Ukraine.
While many countries around the world have been grappling with a cost-of-living crisis, the sticker shock has hit Japanese consumers particularly hard because they had been used to stable prices for so long. Small businesses have struggled to pass on costs to consumers out of fear of ruining their reputation and losing customers, experts say.
“If you ask your customers if you should be increasing pricing, of course they say, ‘No,’” said Jesper Koll, a Tokyo-based economist and investor.
“But the cost pressures - rising food prices, rising energy prices in particular, the terms-of-trade pressure - are obviously very real,” he said. “So you have to raise prices.”
Many ramen shop owners agree: The squeeze on their business is very real.
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Ramen cooks apologize to customers
Taisei Hikage, 27, who runs Menya Taisei in western Tokyo, deftly strains noodles by tossing them in the air and catching them with a wire basket. His 14-seat shop specializes in iekei ramen, known for its pork marrow and soy sauce broth.
When Hikage started in Tokyo’s ramen industry 10 years ago, the noodles were considered a “one-coin meal” because the basic dish could often be had for a single 500-yen ($3.40) piece.
Hikage opened his restaurant in March 2023, offering a bowl for 750 yen ($5.08) before extra toppings. But he has since raised prices twice because of soaring costs, and posted a detailed apology on social media. He now charges 950 yen ($6.44) for a basic bowl.
“We [the industry] are at the breaking point of the 1,000-yen wall. It’s starting to become unsustainable,” Hikage said.
The price of nearly every ingredient in ramen has gone up in the past two to three years, Hikage and other ramen shop owners say: pork, chicken, wheat, seaweed, bamboo shoots, green onions, soy sauce and even oils.
Some of those food price increases were due to poor harvest, but they were also driven by Japan’s high dependence on food imports, economists say.
Then, there is the energy required to simmer the broth over a long period of time to bring out the complex flavors, often requiring shops to keep the power on for 24 hours a day.
Because more than 90 percent of the nation’s total energy supply is imported, according to the Federation of Electric Power Companies of Japan, the country is highly susceptible to global energy supply disruptions, such as that caused by Russia’s war in Ukraine.
“With the war, energy costs also went up, so that had a huge impact,” said Kaneko, the owner of Mendokoro Isshou. “Not only the gas costs for cooking but electricity costs. Keeping the air conditioner on is essential, since it’s so hot [in the summer]. So we are using a lot of energy.”
To enable people to cope with rising inflation, Japan has instituted several increases to minimum wages, taking the national average from 961 yen ($6.45) to 1,054 yen ($7.17).
The wage increases are good news for households but create another challenge for small businesses like Kaneko’s.
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Little relief in sight for noodle lovers
It will take some time before consumers feel the benefit of the yen’s 10 percent gain against the dollar in July, reaching a seven-month high.
Import prices fall as the yen appreciates, but there is about a 10-month lag until this makes it through to food retail prices, said Yamaguchi, the economist at Oxford Economics.
“At least until the end of this year, the pressure from food prices will continue,” Yamaguchi said.
Until then, many ramen shop owners are cautiously raising their prices to or beyond 1,000 yen while keeping quality high so that customers will come back. Some ramen chains are moving to suburbs to bring cheap eats to families struggling with inflation, according to Nikkei Asia.
“Ramen has always been a staple for people with lower income or students and young people … so I don’t necessarily want ramen to become something out of reach for them,” Kaneko said.
But at least some customers appear to be adjusting to the 1,000-yen ramen.
Yuya Henmi, an IT worker who waited outside the Menya Taisei ramen joint for 30 minutes in the middle of a sweltering day, said he doesn’t mind higher ramen prices - as long as the noodles are delicious.
“I like ramen a lot, so I think I’d pay up to 2,000 yen ($13.63) if it’s really good,” said Henmi, 28.
His wife and friend balked, so he quickly added: “But for a normal ramen without toppings, I think 1,500 yen is the max.”
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Video: Japan has been experiencing inflation after decades of low to negative interest rates, and it's affecting ramen, one of the country's favorite cheap meals.(c) 2024 , The Washington Post
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