The continuing depreciation of the Japanese yen against the U.S. dollar is wreaking havoc on the local catering industry, with restaurants and consumers feeling the pinch of the rising costs.
As the yen reached its lowest level since 1990, briefly touching 160.03 against the dollar on Monday, the consequences have been particularly severe for businesses reliant on imported goods.
Tsunenori Shimizu, owner of a steakhouse in Japan's capital city Tokyo, is concerned over the significant increase in costs due to the depreciation of the yen. As most of the beef sold in his restaurant is imported from the United States, the current exchange rate has driven up the purchase prices, said Shimizu.
"The yen depreciates, prices of goods rise, and purchase prices also rise. Compared with 12 years ago when the yen was the strongest, purchase prices are now three times higher," said Shimizu.
To offset the rising costs, Shimizu increased the prices of their dishes. However, the decision has resulted in a marked decline in steak sales, as consumers have become more price-sensitive.
Furthermore, the restaurant is facing additional challenges from the surging prices of water and electricity bills as well as the rising labor costs, all of which have significantly affected the operation of the restaurant.
"Japan's economy has now stalled, and all sectors have been impacted by the spike in prices. Labor costs, water and electricity bills, and food prices are all going up," said Shimizu.
The uncertainty brought up by the weakening yen poses a challenge to the steakhouse, said Shimizu, adding that he may have to consider closing the restaurant and explore alternative business opportunities.
"The ingredient we use is American beef, which is the most severely affected by the depreciation of the yen. In fact, it's not just beef imported from the United States that has seen the rising costs, the prices for all imported beef are rising. I am considering whether to use Japanese beef, or stop selling steaks and switch to other businesses," said Shimizu.
Consumers, too, are feeling the pain of the depreciating currency. They opt to purchase only discounted products to ease the strain on their wallets
"When my wife goes shopping, she always picks the ones on sale or food with 30 percent or 20 percent discounts. Though there is no increase in salary, costs on food are increasing now, which makes me quite difficult," said a diner.
Weakening yen wreaking havoc on Japan's catering industry
Weakening yen wreaking havoc on Japan's catering industry
