A gyudon “beef bowl” is a common fast food in modern Japan, a simple dish of beef and onions over rice. For those of you who need more background, read this.
The gyudon industry has faced a major shake-up over recent years. A decade ago, Yoshinoya was the undisputed champion of the business. It was then victim to a chain of unfortunate events. First, in late 2001, a domestic mad cow incident critically damaged beef bowl sales in Japan, for which Yoshinoya was hurt the hardest. In late 2003, Japan suspended imports of American beef due to a BSE incident, cutting Yoshinoya’s main source of beef. This gave rivals such as Sukiya and Matsuya, which got their beef from places such as Australia and Mexico, a key market advantage which they milked for several years.
A key battlefront in this market competition was not just supply but also prices. Gyudon prices dropped significantly (10-30%) during the time of tight supply from 2001 – 2004/2006, but rose back to normal when supplies returned. (You can see a clear breakdown of the price movements on this Japanese article from Wikipedia.) Now with consumers tightening their belts during the post-financial crisis years, the gyudon industry, which has recent experience (and institutional memory) of price wars are back at the game of trying to bring in customers.
Yoshinoya, despite having the most to lose from a price war, is partially responsible for the situation. A year ago, they dropped gyudon prices from 390 yen to 310 to celebrate their 111th year anniversary. Sukiya responded by offering a gyumeshi “poor man gyudon” for a record-breaking price of 240 yen, and the game of offering alternative cheaper gyudon variants took off. Sukiya achieved its low prices by finding cheaper supplies of beef, onions and rice; offering smaller portions; but also through other cost cutting methods such as cutting down staff. Sukiya in particular has a money-saving option in its franchise manual referred to as “wan-ope” (one operator) to have just one member of staff during nightime operations when the trains aren’t running and when customers are scarce.
And here we see a key externality of the gyudon price wars– a rise in robbery attacks on gyudon chain stores during night hours. In 2010, there were 20 attacks on Gyudon chain stores in three prefectures (Aichi, Gifu and Mie). 18 out of 20 targets were Sukiya stores. It almost looks like the convenience store holdups that became an endemic problem in the US during the 1980s. The primary cause is attributed to the “wan-ope” policy.
In reading articles on these events, I was struck by the correct, yet rather Japanese, closing comment of one article:
“Of course the person to blame for a crime is the person who committed it, but criminal sociologists are sounding the alarm for the responsibility owed by companies to protect the safety of their customers and their employees. In trying to win the price wars, it is understandable to push a rationalization of store management, but it is a fact that there are voices calling on companies to demand an environment that prevents crime such as robbery.”