This report analyses the Japanese market.
Let us first look at the reality of the udon and soba industry.
1.The decline in the number of shops is unstoppable, udon and soba shops
First of all, please have a look at the graph below. You can see the frightening decline in the number of shops.
In a whopping 12 years, the number of shops has fallen by about 30%. This is an average annual decline of 2.5%.
However, a strange phenomenon is now occurring. The number of udon and soba shops is decreasing rapidly, but the market size of the udon and soba industry itself is actually increasing.
What does this mean?
Table: number of shops, market size and average annual/monthly sales in the udon and soba markets
| Western Calendar | Number of shops | Reduction rate | Market size | Yearly | Monthly | Year-on-Year Increase Rate | Remarks |
|---|---|---|---|---|---|---|---|
| 2006 | 32,511 | 100.0% | 1,063,300 | 32,706 | 2,725 | ||
| 2007 | 31,572 | 97.1% | 1,083,400 | 34,315 | 2,860 | 1.3% | |
| 2008 | 30,652 | 94.3% | 1,072,000 | 34,973 | 2,914 | 1.3% | |
| 2009 | 29,787 | 91.6% | 1,066,700 | 35,811 | 2,984 | 1.3% | |
| 2010 | 29,248 | 90.0% | 1,078,500 | 36,874 | 3,073 | 1.3% | |
| 2011 | 28,408 | 87.4% | 1,063,700 | 37,444 | 3,120 | 1.4% | |
| 2012 | 27,348 | 84.1% | 1,072,700 | 39,224 | 3,269 | 1.4% | |
| 2013 | 26,402 | 81.2% | 1,150,600 | 43,580 | 3,632 | 1.6% | |
| 2014 | 25,535 | 78.5% | 1,169,600 | 45,804 | 3,817 | 1.7% | |
| 2015 | 24,646 | 75.8% | 1,237,300 | 50,203 | 4,184 | 1.8% | |
| 2016 | 24,030 | 73.9% | 1,239,700 | 51,590 | 4,299 | 1.9% | |
| 2017 | 23,315 | 71.7% | 1,259,311 | 54,014 | 4,501 | 2.0% | Estimated |
| 2018 | 22,621 | 69.6% | 1,279,233 | 56,551 | 4,713 | 2.1% | Estimated |
What can be read from this table is that the overall market size of the industry has increased (by 120% over the past 12 years), while the number of shops has continued to decrease significantly (to 70% over the past 12 years).
This means that the size of one shop is very large.
From the above data, it can be seen that the amount of sales that can survive in the future will be The above data shows that the amount of sales that will allow you to survive in the future is at least JPY 4 million per month, and preferably or more.
If you want to expand your shop network, the key is to quickly create a business model that can generate monthly sales of 10 million yen.
In Japan, the number of noodle specialty shops is on the decline, and the structure is such that only shops that are productive, profitable, capable of positive investment in the future and capable of reinvestment can survive.
The same is also happening in Kagawa Prefecture, the home of udon, Sanuki udon.
| Year | Number of shops listed | Percentage decrease |
|---|---|---|
| 2011-12 | 785 | 100% |
| 2012-13 | 730 | 93% |
| 2013-14 | 715 | 91% |
| 2014-15 | 708 | 90% |
| 2015-16 | 665 | 85% |
| 2016-17 | 694 | 88% |
| 2017-18 | 680 | 87% |
It is clear that in Kagawa Prefecture the rate of decline is also declining at a similar rate.
2. why have udon and soba restaurants become a difficult business to make money in?
Thirty to 40 years ago, it was said that udon and soba restaurants were very profitable businesses, no matter who started them. Recently, however, it must be said that udon and soba shops have become a very unprofitable business.
In fact, according to TKC data, around 70% of shops are loss-making. Only 30% of the shops are profitable.
Recent TKC revenue data for udon and soba restaurants
| Total number of surveys | Enterprises in the black | Loss-making enterprises | |
|---|---|---|---|
| number of events | 588 | 183 | 405 |
| the same ratio or percentage | 100% | 31.10% | 68.90% |
| Number of employees | 15 | 20.3 | 12.6 |
| turnover | 77,089 | 121,725 | 56,919 |
| the same ratio or percentage | 63.30% | 100.00% | 46.80% |
| variable cost | 25,906 | 39,498 | 19,765 |
| the same ratio or percentage | 33.60% | 32.40% | 34.70% |
| fixed cost | 50,840 | 79,039 | 38,098 |
| the same ratio or percentage | 65.90% | 64.90% | 66.90% |
| interest | 343 | 3,188 | -944 |
The table then shows that those with larger sales sizes are more likely to be profitable companies.
In other words, it is clear that in order to survive, a certain amount of sales growth is required.
3.The biggest problem for existing udon and soba shop owners is not a shortage of staff but a decline in customers
So what are the problems of existing udon and soba shop owners?
Connected to the previous point, the biggest worry is the decline in customers.
| Total number of | Soba and udon restaurants | Soba specialty shops | Udon specialty shops | Standing soba/udon restaurants | |
|---|---|---|---|---|---|
| Decrease in the number of customers | 70.10% | 73.10% | 65.10% | 58.60% | 75.00% |
| Deterioration of location conditions | 18.00% | 19.40% | 16.30% | 13.80% | 50.00% |
| Shortage of manpower and job vacancies | 9.80% | 7.50% | 16.30% | 24.10% | – |
| succession struggle | 7.60% | 9.00% | 4.70% | 3.40% | – |
| fundraising difficulties | 5.80% | 6.00% | 2.30% | 10.30% | – |
| Rising labour costs | 10.10% | 9.00% | 14.00% | 10.30% | 25.00% |
| Rising material costs | 41.80% | 44.30% | 39.50% | 37.90% | 25.00% |
| Rising utility costs | 32.60% | 34.30% | 32.60% | 37.90% | 25.00% |
| Rising water costs | 14.90% | 16.40% | 18.60% | 3.40% | 25.00% |
| Rising fuel costs | 27.70% | 30.30% | 34.90% | 20.70% | 25.00% |
| Aging facilities and equipment | 32.90% | 38.80% | 16.30% | 24.10% | 50.00% |
| Rise in other costs | 8.50% | 10.00% | 4.70% | 6.90% | – |
| Decrease in customer spend | 26.20% | 27.90% | 20.90% | 10.30% | – |
| Other | 2.70% | 2.00% | 7.00% | – | – |
| none in particular | 4.90% | 4.00% | 11.60% | 3.40% | – |
Source: Ministry of Health, Labour and Welfare, Public Health Division, Health Bureau, Ministry of Health, Labour and Welfare
From the actual situation of restaurant business (soba and udon shops) and measures to improve management H26.9.
However, this is extremely strange.
Because, according to the aforementioned data, the market size of udon and soba restaurants was expanding.
However, the biggest concern of the owners of udon and soba restaurants is the “decrease in the number of customers”.
What does this mean?
Chapter 2: The udon and soba market is actually continuing to expand! continued in Chapter 3.