Japanese restaurants flourish here
Sushi restaurants from Japanese franchises appeal to customers with authentic flavor and reasonable prices. / Korea Times file
Domestic companies prevented from expansion for ‘democratization of economy’
By Park Si-soo
Japanese bento providers, including Hottomotto, are gaining popularity among young office workers.
Several curry and omelet restaurants, including Coco Ichibanya, have increased their presence in Seoul and the surrounding areas.
Japanese franchise restaurants are making headway toward Korea as their competitors here wage an uphill battle to stop their expansion.
The government is moving to thwart the rapid growth of major indigenous restaurant brands. Foreign restaurants are exempt from the restriction, prompting concerns that the move, initiated to help small owner-operator restaurants flourish, will end up making the country a “heaven” for offshore chains.
Heightening the fear, the National Commission for Corporate Partnership, a strong advocate of the campaign, is expected to announce a set of non-binding management guidelines this month that are unfavorable to large Korean restaurant chains. The government has urged them to respect the commission’s guidelines or face unfavorable treatment.
Hottomotto is one of the newcomers to the Korean market with an ambitious growth plan. The takeaway bento provider opened its flagship store in Seoul last year with the short-term goal of running 200 outlets by 2015. It is fast gaining popularity with young office workers.
“I eat Hottomotto bento at least once a week,” said Kim Joo-seung, an office worker in Apgujeong. “There are a lot of items I can choose to eat. Plus, the price is reasonable.”
Several sushi restaurants have joined the influx.
Gatten Sushi, Kappa Sushi, Sushiro and Sakana-Ya already have several crowded outlets and will open many more in years to come. They appeal to local customers with authentic sushi recipes and reasonable prices.
“The biggest strength is that we are from Japan,” said a Gatten Sushi spokesman. “The demand for authentic Japanese sushi has always been high in Korea. But the only problem was the high price. We were able to bring down the price with various cost-saving measures.”
Experts said Japanese restaurant giants such as Skylark, Saizeriya and Yoshinoya are also paying keen attention to the Korean market as they struggle with stagnant growth at home amid the prolonged economic downturn.
Those companies don’t have outlets here as yet. If they enter the local market, however, it will bring a massive change to the industry’s landscape, the experts said.
Skylark, one of the biggest family restaurant chains in Japan, has nearly 3,700 outlets, while Saizeriya runs more than 1,000 stores.
Ashley, owned by fashion company E-Land, is the biggest Korean restaurant chain with some 120 outlets. Outback Steakhouse is the second largest with around 100 outlets and CJ Group’s VIPs comes next with 86 stores.
“By the number of stores, it’s a battle of David and Goliath,” said a CJ official.
Against this backdrop, experts said home-grown restaurant chains will find themselves losing growth momentum for the time being as a consequence of the state intervention.
In fact, Caffe Bene, a leading coffee shop brand with family restaurant arm Black Smith, recently carried out large-scale layoffs and executive salary cuts in an aggressive cost-saving drive.
Describing the situation as an “emergency,” the company said nearly 80 out of 500 officials at its headquarters had been sacked and dozens of others were transferred to outlets to support sales and marketing.
Last November, the Fair Trade Commission banned Caffe Bene and four other coffeehouses from opening new outlets within 500 meters of existing outlets.
The cap was employed by former President Lee Myung-bak as rapid expansion of major food companies increasingly threatened the livelihood of mom-and-pop stores. President Park Geun-hye, who took office in February, has extended the policy under her slogan of “economic democratization,” applying additional restrictions meant to curb the chains’ fast growth.