Japanese Food Service Industry

Submitted by: Jason Munsch, Alberta Exchange to Japan
Alberta Agriculture, Food and Rural Development

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Food Service Industry Overview

The food service industry has lost sales due to the poor economic conditions and the increase of HMR's (Home Meal Replacements) at convenience stores. The recession has forced consumers to take a second look at their spending habits.

Ranking for Food Service Industry 1998

Rank
()=Last Year
Company Name Type Sales for FY 1997(in millions of Yen) Change From Last Year (%)

1 (1) McDonald's Japan Hamburger 333,133 11.7

2 (2) Hokka Hokka Sohonbu Onigiri, bentos 172,812 5.4

3 (3) Skylark General Western Food 150,767 3.0

4 (4) Kentucky Fried Chicken Japan Fried Chicken 137,362 -1.3

5 (6) Daskin (Mr. Donuts) Donuts 134,034 10.3

6 (5) Mos Food Service Hamburger 129,000 2.3

7 (7) Royal General Western Food 121,795 1.8

8 (8) Honke Kamadoya Onigiri, Bentos 114,433 3.1

9 (9) Denny's Japan General Western Food 103,640 3.0

10 (10) Seiyo Food Systems Various Activities 98,248 2.7

Source: Nikkei Ryutsu Shimbun

Current Profit Ranking

Rank
()=ranking in sales
Company Name Profit for FY 1997(in millions of Yen) Profit for FY 1996(in millions of Yen) Change from Last Year (%)

1 (1) McDonald's Japan 23,063 20,574 12.1

2 (14) Yoshinoya D&C Co. 11,000 10,520 4.6

3 (3) Skylark 8,240 9,733 -15.3

4 (9) Denny's Japan 7,940 7,310 8.6

5 (7) Royal 5,657 6,011 -5.9

6 (6) Mos Food Service 4,500 5,682 -20.8

7 (19) Osho Food Service 3,800 3,527 7.7

8 (10) Seiyo Food Service 3,300 4,362 -24.3

9 (80) Joyfull Co. Ltd. 3,105 2,893 7.3

10 (18) Shidax 2,780 - -

Source: Nikkei Ryutsu Shimbun

Food Services Industry Competition

The competition of the food service industry does not only include restaurants, fast food chains, bars etc. but also convenience stores (CVR's). CVR's sell HMR's which take customers away from eating out. Therefore, when pricing its products, a company must also include the opportunity cost of its customers buying HMR's at a convenience store versus eating at restaurants. For example, if a customer has the choice of purchasing a HMR at a convenience store for 800 J/yen or going out for dinner at a restaurant for 1200 J/yen the difference of 400 J/yen includes:

Service;
No clean-up after the meal is finished;
Freshly prepared food instead of reheated;
A variety to choose from (menu); and
atmosphere

If the customer who purchase HMR's is not willing to pay the extra 400 J/yen then the company has to re-evaluate its price strategy and look at its market segment more closely.

More and more restaurants are increasing the number of ‘take out' items on their menu to compete with convenience stores. Currently most of the ‘take out' items are made up of side dishes or desserts. There are very few complete meals that can be ‘taken out'.

This information is maintained by: Gail Atkinson
Last Revised/Reviewed January 27, 1999

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Ranking for Food Service Industry 1998
*Rank* *()=Last Year*	*Company Name*	*Type*	*Sales for FY 1997(in millions of Yen)*	*Change From Last Year (%)*
1 (1)	McDonald's Japan	Hamburger	333,133	11.7
2 (2)	Hokka Hokka Sohonbu	Onigiri, bentos	172,812	5.4
3 (3)	Skylark	General Western Food	150,767	3.0
4 (4)	Kentucky Fried Chicken Japan	Fried Chicken	137,362	-1.3
5 (6)	Daskin (Mr. Donuts)	Donuts	134,034	10.3
6 (5)	Mos Food Service	Hamburger	129,000	2.3
7 (7)	Royal	General Western Food	121,795	1.8
8 (8)	Honke Kamadoya	Onigiri, Bentos	114,433	3.1
9 (9)	Denny's Japan	General Western Food	103,640	3.0
10 (10)	Seiyo Food Systems	Various Activities	98,248	2.7

Current Profit Ranking
Rank ()=ranking in sales	Company Name	Profit for FY 1997(in millions of Yen)	Profit for FY 1996(in millions of Yen)	Change from Last Year (%)
1 (1)	McDonald's Japan	23,063	20,574	12.1
2 (14)	Yoshinoya D&C Co.	11,000	10,520	4.6
3 (3)	Skylark	8,240	9,733	-15.3
4 (9)	Denny's Japan	7,940	7,310	8.6
5 (7)	Royal	5,657	6,011	-5.9
6 (6)	Mos Food Service	4,500	5,682	-20.8
7 (19)	Osho Food Service	3,800	3,527	7.7
8 (10)	Seiyo Food Service	3,300	4,362	-24.3
9 (80)	Joyfull Co. Ltd.	3,105	2,893	7.3
10 (18)	Shidax	2,780	-	-

Japanese Food Service Industry

Submitted by: Jason Munsch, Alberta Exchange to Japan Alberta Agriculture, Food and Rural Development

This information is maintained by: Gail Atkinson Last Revised/Reviewed January 27, 1999

Submitted by: Jason Munsch, Alberta Exchange to Japan
Alberta Agriculture, Food and Rural Development

This information is maintained by: Gail Atkinson
Last Revised/Reviewed January 27, 1999