Yoshinoya Holdings Co. President Yasutaka Kawamura has highlighted the group’s intention to enhance the operations of its udon noodle restaurant subsidiary Hanamaru Inc.
In an interview, he said if Hanamaru achieves about half the sales of gyudon (shredded beef on rice) restaurant operator Yoshinoya Co., the main arm of the Yoshinoya group, the noodle unit would be able to post an operating profit roughly on par with Yoshinoya’s, he said.
“We will be able to have two main business pillars (of gyudon and udon) in about three years,” Kawamura said.
In the business year to February 2015, the gyudon unit logged sales of ¥95.3 billion and an operating profit of ¥4 billion. In the same year, Hanamaru’s sales and operating profit were ¥20.1 billion and ¥900 million, respectively.
Kawamura indicted that it would be possible for Hanamaru to operate udon restaurants with high profit margins.
Kawamura also said, “We plan to increase the number of our restaurants in China to 1,000 from some 500 at present at an early time so that we will have more outlets abroad than in Japan.”
Also by expanding its business in Southeast Asia, Yoshinoya Holdings is aiming to raise the proportion of profits it generates abroad to 50 percent of the group’s total, Kawamura said.
The domestic udon business and overseas operations are “growth engines” for the group, he said.
Yoshinoya at home has suffered from a drop in customers after it hiked the price of gyudon in December 2014. But Kawamura was pessimistic on the prospect of reducing gyudon prices to win back customers.
Meanwhile, he signaled plans to review the content and prices of vegetable-on-rice dishes, a new menu item introduced at Yoshinoya restaurants in May this year.
Kawamura showed displeasure at the ruling coalition’s recent decision to exclude dining out items from the scope of foods subject to a reduced tax rate when the consumption tax is hiked to 10 percent from 8 percent in April 2017.
The tax rate for foods sold at supermarkets and convenience stores will be lower than foods served at restaurants, which was a regrettable situation, he said.