Dear Readers,

The coronavirus (COVID-19) pandemic continues to disrupt everything around us, everywhere. This has been a difficult season for everyone, and now there are concerns about a second wave of the pandemic. But we sincerely hope that the ISHES perspectives on happiness, economy and society will help our readers stay positive and look for inspiration and creative ideas to get us through this together.

In this September 2020 issue, you will find the following articles:

- Sustainable Business through Reverse Thinking: Why a Kyoto Restaurant Stops at 100 Meals a Day
Hyakushokuya restaurant in Kyoto aims to sell 100 meals a day, and that's all. In the era of COVID we all need to rethink society and how we do things. Are there any hints for you in this restaurant's counterintuitive business model that's based on not trying to increase revenues?

- Recommended articles from the JFS Newsletter
We introduce an article from the perspective of Eastern thought, about seeking balance between "yin" and "yang" when we look at the concept of economic growth.

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Sustainable Business through Reverse Thinking:
Why a Kyoto Restaurant Stops at 100 Meals a Day
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Hyakushokuya website

By Institute for Studies in Happiness, Economy and Society (ISHES)

The spread of COVID-19 has impacted many restaurants, causing them to undergo a business crisis. Japan has not undertaken forcible lockdowns so far, but it did declare a state of emergency in April and May 2020, and requests for temporary closures or reduced hours of business have frequently been issued by prefectural governments, especially for urban areas.

Shops have to pay the necessary rent and staff even when operations are suspended. Moreover, even when resuming operations, they face financial hardship if they have too few customers. In tourist areas, a decline in tourist numbers can directly hurt the restaurant business. With fears of long-term impacts of the novel coronavirus, it is clear that conventional business models may no longer work.

So what should be done? "Reverse thinking" as an approach to this issue can be seen in the business model put forward by Hyakushokuya, a restaurant in Kyoto specializing in steak and rice bowls featuring Japanese beef. As the restaurant's name implies (translated literally, 100 Meal Shop), its target is to "sell no more than 100 meals a day." Normally, a restaurant's goal would be to sell as many meals as possible, so from this perspective the model may surprise some people. Of course, they will not make a big profit selling only 100 meals. However, through their decision to sell only 100 meals, they have eliminated food waste, and their employees can go home at the end of the day without having to work overtime. Overtime has been a matter of course for workers in Japan's restaurant industry, so the very idea of not having to work overtime is groundbreaking.

Hyakushokuya opened in 2012. Initially, the owner, Akemi Nakamura, ran the restaurant as a family business, but it currently employs a hired staff of five. Its "sell no more than 100 meals" business model has garnered a lot of attention. Nakamura published a book in 2019 titled, "Uriage wo Herasou" (Reduce Your Sales), and the media featured the story repeatedly.

The Genius of Hyakushokuya

Key ingredient: Confidence in the menu

The menu offerings at the Hyakushokuya restaurant include no more than three dishes: Japanese beef steak-on-rice bowl, Japanese beef steak with grated daikon and ponzu platter, and 100% Japanese beef Salisbury steak platter. The signature dish, the steak-on-rice bowl, is a specialty the owner's husband created and takes pride in, offering it with confidence to all customers. Because the Hyakushokuya menu offers only three kinds of meals centering on the steak bowl, many other things become possible.

Normally, restaurants buy a block of meat, but only about 75% of it is actually used in meals. Hyakushokuya manages to use about 90%. This is because it minces leftover meat for use in the Salisbury steak dish and boils parts that would normally be discarded to make sauce, making use of almost everything, with nothing left over. Moreover, it cooks the meat every day right after receiving it, so nearly none of it must be discarded due to drying out. The decision to sell no more than 100 meals a day eliminated the need to prepare any more meat or rice than that. If extra food is not prepared, none is left over. For this reason, the kitchen at Hyakushokuya does not even have a freezer.

By simplifying everything, they have managed to turn a profit even if they serve only 100 meals.

Advertising cost zero, big savings on rent

Hyakushokuya is said to spend no money whatsoever on advertising. Its customers spread the word to their friends about the delicious food via social media. This word-of-mouth communication provides the restaurant's publicity. This strategy is made possible by absolute confidence in its cuisine.

Also, although Hyakushokuya is near a train station, it is located off the main road. The reason is that rent is cheaper on side streets. Usually, shop owners prefer ground-floor restaurants along main streets because potential customers can easily find them if they feel hungry as they walk by. But what if they just hear about a restaurant like Hyakushokuya via social media? They can find it with the map on the restaurant's website, even if the restaurant is on a side street. If that works, it makes sense to choose cheaper location to keep the cost of rent down. This is also a scheme for turning a profit on 100 meals, by minimizing expenses like this.

The strategy of controlling operating costs and providing the finest food to make up for selling only 100 meals is also a means of making the goal clear to employees and freeing them of overtime. Hyakushokuya is open from 11 a.m. to 2:30 p.m. (last order). These business hours enable workers to head home by 5:45 p.m. at the latest. Nakamura says the ability to go home early is an incentive for workers as attractive as cash.

An even slimmer business model: 'Hyakushokuya 1/2'


Hyakushokuya 1/2 website

But there may be cases when it is not even possible to sell 100 meals a day. The COVID-19 pandemic has made it tough for many restaurants to sell even 100 meals a day. Hyakushokuya opened a "Hyakushokuya 1/2" restaurant in 2019. As its name implies, it operates by a business model for managing with sales of one half of a hundred -- only 50 meals a day.

Hyakushokuya calculates that it needs one employee for every 20 meals served, so it employs five workers at its regular restaurant. However, it assumes that two workers are enough to run a Hyakushokuya 1/2. This is a slim business model that would allow a married couple to manage a restaurant on their own. With each meal priced at 1,000 yen, sales in the "1/2" restaurant would be 50,000 yen a day, and that would work out to about 1.25 million yen a month. Subtracting costs such as rent and food supplies, leaving about 500,000 yen, means a couple could earn an annual household income of about 6 million yen (roughly 56,500 US dollars).

Nakamura's motivation for considering Hyakushokuya 1/2 was the calamities that occurred in 2018. That year, western Japan was visited by a series of disasters, starting with an earthquake in northern Osaka Prefecture in June, then torrential rains in western Japan in July, and Typhoon Jebi striking Osaka in September. The reduction in tourists, even in Kyoto, Japan's premiere tourist area, made it difficult for Hyakushokuya to sell out 100 meals a day. However, even when customer numbers declined, they were able to sell out 50 meals a day, so devised ways to survive that way.

Hints for the era of COVID

Normally, a business will do anything to increase sales. When a business is struggling, the question is usually "How can we boost sales?" With that logic, to increase sales a restaurant would open not only for lunch but also extend its hours into the night. If a restaurant can sell 100 meals, the next goal might be 150. Such goals may boost sales. But to increase sales "just a little" a shop has to procure more supplies, and waste will inevitably result. Moreover, when employees are busy serving customers, they can't prepare for the next day, so they might have to work overtime. Not much attention is typically paid to these kinds of adverse "side effects" of trying to boost sales.

What will happen if the coronavirus slowdown drags on and businesses find it difficult to operate like they did when there were many tourists and shoppers before COVID-19? Would it not be more sustainable with models to survive on smaller sales? Moreover, the example of Hyakushokuya's business model can help achieve the UN's Sustainable Development Goals (SDGs) thanks to benefits like preventing food loss and helping employees avoid long working hours.

With the coronavirus slowdown, many people are thinking we may need to reconsider how our society and lifestyles have worked so far. Currently, however, it is not clear how things should change. In the midst of all this, perhaps Hyakushokuya's business model has some hints for us with its reverse thinking of not trying to increase sales.

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Recommended articles from the JFS Newsletter on sustainability issues in Japan

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In this regular section of each issue of the ISHES Newsletter, we recommend past articles from Japan for Sustainability newsletters. The non-profit JFS was active from August 2002 until July 2018, sending out information to the world with the aim of moving society in Japan and the world toward sustainability and greater happiness.

This month we introduce an interview with Yoshifumi Taguchi, a scholar of Eastern philosophy, about the concept of economic growth. What does it mean to seek some balance between "ying" and "yang" when it comes to economic growth?
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The Pursuit of Economic Growth Requires a Balance between 'Yin' and 'Yang'
https://www.japanfs.org/en/news/archives/news_id035300.html

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ISHES Team
Institute for Studies in Happiness, Economy and Society
E-mail: inquiry_en@ishes.org
www.ishes.org/en/

*The Institute for Studies in Happiness, Economy and Society (ISHES) is an organization based in Japan that is working to build a happy and sustainable society. To this end, we need to think about happiness, the economy and society together by learning from, analyzing, and thinking about theories and cases in Japan and around the world on what happiness is and what kind of economy and society will create and support happiness.

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