A record number of ramen shop operators in Japan went bankrupt in 2024 as many hesitated to hike prices above 1,000 yen (US$6.4) despite surging costs.
Some 72 of them shuttered with over 10 million yen (US$64,400) in liabilities last year, a 30% increase from 2023, Kyodo News reported, citing research firm Teikoku Databank.
Around 34% of the 350 ramen businesses surveyed by the firm reported operating at a loss during the 2023 fiscal year, which ran from April 1, 2023, to March 31, 2024.
Ramen, a beloved Japanese noodle soup, is regarded as a low-cost meal especially popular among individuals with lower income, students and young people, whether enjoyed as a quick lunch or a late-night treat.
But the cost of making these affordable bowls of noodles has been going up, with ramen shop owners reporting that the prices of nearly every ingredient, including meat, seaweed, green onions, and even soy sauce, have increased.
Energy costs have also been a challenge, as ramen shops need to simmer the broth for extended hours to develop its rich flavors, often requiring them to keep power running at all times.
With over 90% of Japan’s energy supply imported, global disruptions, such as those caused by the ongoing conflict between Russia and Ukraine, have had a large impact on energy costs.
“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,” Tetsuya Kaneko, the 44-year-old owner of the Mendokoro Isshou ramen restaurant in Tokyo, told The Washington Post.
“I think everyone in the industry is struggling,” he said, noting that the rise in prices in the last few years has been “unbelievable.”
Despite rising costs, Teikoku Databank reported that the average price of a bowl of ramen remains below 700 yen.
A number of ramen eateries have been raising their prices, but the average customer spending at these establishments remains lower than at other restaurants.
The average spending per customer at ramen shops was estimated at 880 yen in 2023, as against 1,360 yen for family restaurants and 1,190 yen for conveyor belt sushi restaurants, according to Fuji Keizai, another research firm.
However, businesses are hesitant to raise prices closer to or above 1,000 yen, a move that they believe could damage ramen’s reputation as an affordable option and potentially drive customers away.
Some restaurants that hiked prices reported that their customers did not respond positively.
Takatoyo Sato, 52, manager of Menkoi Dokoro Kiraku noodle shop in Tokyo’s Shimbashi business district, said customer numbers dropped after the price of shoyu ramen went up from 780 yen in 2021 to 950 yen last May. “People don’t say it, but they think it’s just ramen — that view is going to change,” he said.
Some shop owners decided to raise prices above 1,000 yen and maintained high quality to attract returning customers, while others have relocated to suburban areas, where profitability has increased over urban locations with expensive rents.
As for ramen enthusiasts, some have adapted to the 1,000-yen price tag.
Yuya Henmi, a 28-year-old IT worker from Tokyo, said he would accept higher prices for tasty ramen and would even spend up to 2,000 yen for an exceptional one. “But for a normal ramen without toppings, I think 1,500 yen is the max,” he added.
Teikoku Databank has predicted that ramen shop closures in Japan could persist this year, with smaller businesses more hesitant to adjust their menu prices than larger chains.
Sato hopes costs do not rise any further this year as customers are not ready to accept higher prices yet.
Meanwhile, Mendokoro Isshou’s Kaneko wants to hold on to ramen’s traditional appeal. “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.”
