Answer / Introduction
The answer comes down to three factors:
First, sushi restaurants are part of the foodservice industry and are therefore exposed to the same dynamic that plagues most establishments: namely sky-high food, labor, as well as rent costs.
Second, preparing sushi involves a good amount of food waste, with as much as 35% to 50% of the fish purchased going into the trash.
In fact, Hiroyuki Okamoto – writing for the online edition of AERA magazine (a weekly periodical bearing the imprimatur of The Asahi Shimbun, one of the country’s largest newspapers), estimates that only between around 30% to 40% is usable in the preparation of sushi.
Third, while, increasingly, this only applies to more authentic restaurants in Japan that still uphold traditional manners and customs, another factor is difficulty in securing talent capable not just of preparing the finest sushi, but also of providing superior customer service.
The trend seems inexorably toward more casual service, but it is still common enough in Japan that I have had the chance to experience some of this fervor for hospitality first-hand.
For example, the staff has your dietary preferences down to a tee, no matter how infrequent one’s patronage.
And by dietary preferences I don’t mean standard things like allergies and the like; rather, I’m referring to what toppings or beverages you ordered on your last visit—whether that was last month or the year prior is wholly immaterial.
Knowing this is why I couldn’t help but smile when I read a passage from Trevor Corson’s The Story of Sushi, in which he mentions a short story from 1939, titled Sushi.
The setting for the book is a local sushi bar run by a chef who remembers what each patron likes, and in what order.
Even almost a century later, some things never change.
Also, traditional restaurants always make sure that the customer is handed crisp bills as change when paying cash, as a sign of respect.
Needless to say, this attention to detail makes it difficult to find qualified staff and is also indicative of an unwillingness to compromise in other aspects, leading to surging costs and lower margins.
How Much Does It Cost to Make Sushi?
For us to figure out why sushi is so expensive, we must first work out how much it costs to make.
Is it simply a matter of restaurant owners trying to maximize profits by charging more, or is it that the cost inputs are so high that restaurateurs have little choice but to charge more?
Searching for answers, I turned to Japan – the mecca for sushi aficionados and a country with several large, publicly-listed sushi restaurant chains.
Because this information is publicly available, it gives us a decent estimate of how much these companies spend on costs like ingredients, labor, and rent.
Take Kura Sushi and Genki Sushi: since 2013, the cost of direct inputs (such as ingredients) has remained incredibly stable at around 41% to 45% for both companies.
Other players in the foodservice industry have lower (albeit rising) costs, so this seems to corroborate the idea of lower margins stemming from the fact that only the fillet portion, i.e., the finest cut, is used.
That notwithstanding, it should be mentioned that both Kura and Genki Sushi end up with considerably higher overall margins (4% – 5%) when compared to other restaurant industry players.
At Yoshinoya—which runs a chain of beef bowl restaurants—very little (less than 2% on a good year) is left after deducting the cost of all the inputs including ingredients, labor, utilities, logistics and distribution, rent, etc.
For Zensho—which runs another (much larger) chain of beef bowl restaurants, as well as numerous other casual dining establishments—this number hovers around 2% to 3%, so things aren’t much better.
While still not a great business, this difference shows that, while sushi may have started out as fast food back in the nineteenth century, its status as a delicacy is now firmly established, and with that comes a higher price point, even within the context of ultra-casual dining, i.e., the bottom rung of the restaurant hierarchy.
Undoubtedly this plays a factor, but beyond sushi’s august standing in modern-day gastronomy lies another factor of a more mundane, managerial nature: automation.
Kura Sushi is a good example in that they now offer a nearly fully-automated experience to customers: everything–from actual table reservations to the ordering process–is done either from one’s phone or using one of the tablets provided by the restaurant.
Beverages are also dispensed in a fully automated manner, robots prepare the sushi rice (or sumeshi to use the original Japanese term), and the weight of the toppings is fully standardized at just below 9 grams (0.31 ounces) per piece.
(According to an article on IT media business online)
“Good enough” is the name of the game, leaving little room for artistic expression or reverence for tradition.
What’s It Like At High-end Sushi Restaurants?
Diametrically opposite is the strategy for smaller, independent restaurants: rather than focusing on cost efficiency, these establishments emphasize quality and craftsmanship.
This reverence for craftsmanship is evident in the restaurant layout itself: very limited seating capacity centered around a sushi counter where an experienced chef selects the finest cuts matching the restaurant patrons’ orders.
This dynamic, especially at the very high end of the restaurant hierarchy, has led to some interesting situations, such as Sukiyabashi Jiro—a favorite of A-list Hollywood celebrities and even a former US President—being removed from the Michelin Guide for being too exclusive.
With a seating capacity of only 23, the restaurant employs a model reminiscent of Domaine de la Romanée-Conti in the world of fine wines: they could certainly expand, but prefer not to so as not to diminish the value of their brand and legacy.
Interestingly enough, Sushi Saito—with a seating capacity of only 8 people—makes Jiro seem like a school cafeteria by comparison.
(Although, in all fairness, the Sukiyabashi Jiro location in the Roppongi Hills building also only accommodates 8 guests, as opposed to the 23 at the Ginza location.)
Predictably, this three Michelin-starred restaurant was also dropped by the world-renowned food guidebook on account of it no longer being open to the general public.
Same story with Sushi Yoshitake and its seating capacity of 13 people, although, at least for now, the restaurant still retains its status in Michelin’s top tier.
By contrast, Quintessence and Joël Robuchon—both of which specialize in French haute cuisine—have a seating capacity of 30 and 40 people, respectively.
Beige Alain Ducasse Tokyo ups the ante to 50 people.
This disparity in seating capacity really highlights the performative element found in mid-to-high-end sushi places, as these establishments offer a more intimate atmosphere with chefs demonstrating their culinary prowess all the while exerting a surprising level of control over their surrounding environment.
This philosophy is why less experienced sushi-goers sometimes raise the ire of chefs with such faux pas as trying to order a salmon topping at mid-tier or above establishments.
Salmon is not part of the traditional Edo-style sushi canon, so it is not found at a large number of Tokyo restaurants.
The mere act of asking means the customer’s culinary senses are not yet sharp enough to fully appreciate the experience: they’re “too green,” one might say.
Interestingly enough, people close to me have had a similar experience at a run-of-the-mill okonomiyaki (a savory pancake dish) place, so this indicates that reverence for tradition and craftsmanship in Japan is prevalent across all restaurant tiers.
The Average Sushi Meals Lasts Less than 30 mins.
Another thing that may not be readily apparent is the fact that while sushi restaurants may be smaller, that doesn’t necessarily mean they serve fewer people.
I’m specifically referring to the length of the meal, with your average six-course meal at a fancy French or Italian restaurant lasting a leisurely two to two-and-a-half hours.
That’s actually not bad value for money when you factor in the experience.
Sushi restaurants, on the other hand, probably have one of the highest table turnover rates, with the average meal lasting under half an hour.
This difference in the way food is consumed in different settings paradoxically underscores just how expensive sushi really is: they can charge more and actually have higher turnover rates.
In other words, it’s the proverbial case of having one’s cake and eating it too.
Some Sushi Restaurants Don’t Even Show Prices
Finally, a tool that medium-to-high-end sushi places have at their disposal is the ability to offer variable prices.
Since sushi is procured fresh, and since prices can be volatile, this system — called Jika (時価) — allows restaurants to stay in business by adjusting prices on a daily basis.
Given that they’re in constant flux, prices are not written down, although customers are allowed to ask, provided they do so discreetly.
With that being said, at this level, the bill easily exceeds $300 per person (more likely $500+), so one has to wonder if there’s any real practical value at all in inquiring.
Sources
– Okamoto, Hiroyuki; AERA dot. (AERA online exclusive); 10/16/2019
– Corson, Trevor; The Story of Sushi
– Mitsui, Sotaro; IT media business online; 03/31/2020
