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.