Fans of Osaka’s flour-based food culture facing price hikes

By Seiji Tabata and Kazuki Sato / Yomiuri Shimbun Staff Writers

13:30 JST, March 28, 2022

OSAKA — Eateries that serve dishes representative of Osaka’s flour-based food culture, such as takoyaki fried octopus balls and okonomiyaki savory pancakes, have been hit by further price hikes for raw materials as a result of Russia’s invasion of Ukraine.

Takoyaki and okonomiyaki restaurants have already been buffeted by the novel coronavirus pandemic, which has caused a drastic drop in footfall. As economies have started to pick up worldwide, the soaring prices of raw materials, including flour, has hit such businesses hard. Some are considering raising their prices, and popular dishes may be less affordable for a while.

Reluctant raises

“Even though various goods have become more expensive, we wanted to be the last to up prices, so we’ve held off on hikes,” said Ryota Shimada, who runs two takoyaki shops in Higashi-Yodogawa Ward, Osaka City.

However, Shimada is now considering adding ¥20 or ¥30 in April to the price of six-piece takoyaki sets, which currently sell for ¥420. It will be the first time for his stores to raise their prices, with the exception of an increase that reflected the consumption tax rate hike, Shimada explained.

As his shops are located near a university, many of his clients are former students. However, customer numbers plunged when the university began offering online classes amid the pandemic. As a result, sales fell to a level about 40% lower than pre-pandemic figures.

Shimada’s outlets were subsequently affected by price hikes, not only on flour and octopus, but on disposable chopsticks, containers, gas and electricity.

“Consumers in Osaka are pretty sensitive about prices, so I wanted to avoid any hikes,” Shimada, 47, said. “But I’ve got no other choice now if I want to continue running my businesses.”

Invasion accelerating rise in prices

In February, prices for vegetable oil and flour rose 51.1% and 13.2%, respectively, compared to the same month last year, according to the domestic corporate goods price index — a collective term for the price of goods traded in the corporate sector — released by the Bank of Japan.

There may yet be further price increases, as the government’s selling price for imported wheat for milling companies is expected to go up by 17.3% in April, following its half-yearly revision. The revision is primarily the result of unseasonable weather in North America. But it also due to Russia’s invasion of Ukraine, both of which are major wheat-producing countries.

Restaurant chain operators also have been under pressure to raise their prices. Idea Co., an Osaka-based company that operates the okonomiyaki restaurant chain Tsuruhashi Fugetsu, is considering a hike in April or later.

“We can’t tell how much it’ll cost to buy ingredients in the future,” a company official said.

The operators of restaurant chains Kushikatsu Daruma and Kushikatsu Tanaka, which serve deep-fried skewered food, also are considering bumping their prices upwards.

Makoto Morita, a senior analyst at Daiwa Securities Co., expects the government’s selling price for wheat to increase again by about 20% when it is revised in October, if the situation in Ukraine worsens.

“Restaurants may be forced to up their prices more drastically,” Morita said.