Japan’s beef bowl — a symbol of deflation — to get first price hike in 24 years

Reuters, JIJI

Fast-food company Yoshinoya Holdings Co. said Tuesday it will raise the price of its signature beef bowl dish — long a symbol of the deflationary economy — for the first time in 24 years due to higher import costs.

The move marks a much-needed win for the Bank of Japan, which is struggling to achieve its 2 percent inflation target after two decades of falling prices. Reversing the deflation trend and reviving consumption is key to Prime Minister Shinzo Abe’s strategy to jump-start the economy.

Yoshinoya, in the beef-bowl business for 115 years, said it will raise the price of its regular-size “gyudon” dish by 27 percent to ¥380 on Dec. 17, citing a spike in U.S. beef prices and the yen’s sharp depreciation against the dollar.

The price will rise to ¥550 from ¥460 for a large bowl, and to ¥680 from ¥560 for an extra-large bowl.

Gyudon is a bowl of rice topped with sauteed beef and onions that is a favorite of Japan’s penny-pinching corporate employees, and thus an informal measure of consumer prices.

It will be the first pure price hike for the dish since March 1990, excluding an adjustment to prices in April to reflect the increase in the consumption tax to 8 percent, a company spokesman said.

The price hike will be welcome news for the BOJ, which eased monetary policy further in late October to counter the deflationary effect of slumping oil prices and weak domestic demand.

Oil prices have fallen 15 percent since then, likely putting the inflation target further out of reach.

Some policymakers at the BOJ now fear that core consumer inflation will slow to about 0.5 percent by the middle of next year, down from May’s peak of 1.4 percent.

  • NicolaBernini

    Actually it is imported inflation not inflation coming from higher internal demand hence imho it is not a very good news.

    Inflation is a phenomenon that can have many causes, some good some bad for an economy like the Japanese one: I think that inflation coming from an increase in the demand would defo be a good news while inflation caused by higher import costs is not so good …

    Let’s wait for people reaction to this price increase: it is very likely that they react reducing the demand for that good hence bringing its price down again …

  • Squidhead

    This is the worst day of my life. :-(

    Oh well, Sukiya is better.

  • WalterFeldman

    Meanwhile, household incomes continue to decline…

  • Lesley Ito

    This article is poorly researched. For years, Yoshinoya’s beef bowl (nami gyudon) was 400 yen, until competition from Sukiya (who is suffering due to a too-quick expansion) drove them to reduce the price to 300 yen. Therefore, 380 yen is actually lower than the price from years ago.

    The worst blow to Yoshinoya’s business model was never the yen/dollar ratio. It was the mad cow disease scandal leading to ban of USA beef imports for a few years.

    • NicolaBernini


      tnx for your contribution.

      However the price dynamic should be analyzed in the short term to analyze the short term price dynamics …

      Actually to me it’s reasonable that this price has slightly increased because of import costs: probably the beef is imported and yen devaluation is responsible for this hike …

      Anyway the point is that importing inflation in a condition of very weak demand can be dangerous: maybe Abe is doing this because he is trying to pursue a sort of hidden protectionist policy, because imports will become more expensive and Japanese goods and services will become more competitive.

      In terms of food, this could shift consumers preference toward fish instead of beef

      • itoshima2012

        Nicola, good argument, but fish is much more expensive than beef in Japan, maybe they go for chicken, or as they have been doing for many years now here go for the pork-bowl. As for Abe having some hidden agenda, don’t think so, he’s to shallow for that. The huge debt and bond buying by the BOJ is to blame for the demise of the Yen as well as the carry trade that was the last 2 years to appetizing and will be so for the foreseeable future so the Yen will keep on diving. All beef used in those chain stores comes either from Australia or from the US so is paid in foreign currency and there’s only so much they can reduce the amount of beef on the rice after which they’ll have to increase the price or go out of business. I remember my first Yoshinoya 20 years ago, beef played definitely a larger on the rice than as it is now…… it’s now as thin as paper…. and 80% seems to be onions.. I like onions, but they should call it タマネギドン ;-)

      • NicolaBernini

        Hi itoshima2012,

        tnx for your contribution.

        About the fish you are right, what I wanted to say is that Japanese consumers will be shifted to prefer some cheap Japenese production (chicken, pork) compared to expensive imports, like the US / Australian beef.

        Regarding Abe, I’m not an expert of Japanese politics (actually I’m living in Italy ;) ) but I observe that he is about to improve his position in the Lower House because he is likely to win the coming elections so or he is a lucky guy or he is a sly one …

        Regarding the Yen and the carry trade,

        the zero rate policy of the BoJ favours Japanese debt easy refinancing but Japanese banks have some “approfit for profit” and carry trade is imho a good way to calm it down a little …

        Presently I see some good investment opportunities around the world for Japanese carry traders like the rising USD because of tapering and some Eurozone Sov Bonds …

        About the Abe hidden agenda,

        I think his real plan is to slightly improve protectionism around Japanese Economy exploiting the yen devaluation.

        If he would rise internal demand with no strong devaluation, I suppose the Japanese market will be flooded by imported goods (maybe Chinese ones) hence growing huge trade deficits …

        and that’s not good.

        Yen devaluation will make Japanese goods grow their competitiveness with respect to the other’s ones hence later increasing internal demand by means of fiscal policy will not cause the above mentioned trade deficits … Low oil price will surely help …