Budget-friendly restaurant chain Saizeriya succumbs to rising costs

Popular Italian restaurant chain Saizeriya, famed for its inflation-defying cheap dishes, plans to raise prices this month for the first time in six years, shedding light on a business strategy that has allowed it to maintain rock-bottom prices for so long.

Starting Thursday, the restaurant chain will raise the prices by an average 6% across the menu, with some stores with higher operating costs seeing a 10% increase due to rising raw material and energy costs.

With the price hike in 2020 during the COVID-19 pandemic focused on rounding up prices to reduce the exchange of coins, it is the first time since 1998, when Saizeriya became a public company, for there to be a comprehensive price rise. It will also be the first time the prices will vary among locations.

“It’s deeply regrettable, but we’ve determined that we must raise prices,” Saizeriya CEO Hideharu Matsutani said at a news conference on Oct. 14. “At the moment, this seems to be the only way forward. If we lose customers, we’ll have to accept that we weren’t good enough.”

Shareholders have plenty to be happy about: Saizeriya’s stock price rose following the announcement, from ¥6,550 on Oct. 14 to ¥7,620 at Friday’s closing.

Customers, however, would be the ones bearing the brunt of the price increase. And so far, their response has been resoundingly positive.

Immediately following the announcement, fans flocked to social media to voice their support for Saizeriya, suggesting that no apology was necessary. Some even said they’d be willing to pay more.

“Saizeriya has kept its prices so ridiculously low for so long that people say things like, ‘It’s cheaper to eat at Saizeriya than to cook for yourself at home,’” said Nahoko Yamashita, 32, a self-proclaimed chain restaurant aficionado who lives in Tokyo. “If anything, I think most people are just impressed by how unbelievably cheap it’s been up until now.”

Yamashita added that, given the stock price’s gains and the company’s overseas expansion, she was interested in purchasing Saizeriya stock for herself.

Saizeriya’s affordability is an essential part of its brand image, and its management strategy had historically been centered around keeping its signature Milano-style doria dish locked at ¥300 ($1.90), which will now be raised to ¥320.

The company had managed to avoid price increases previously by cutting costs, including through employing robot servers, and improving efficiency by investing in its own vegetable farms and processing plants.

“With the situation in the Middle East and other geopolitical issues, oil prices have been rising, as have gasoline prices,” said food industry analyst Daisuke Miwa. “The company has reached a point where the cost of transporting goods has become difficult to manage through its cost-cutting efforts alone.”

Saizeriya’s latest financial results showed the profit margin for its domestic restaurant business in the 2026 business year through August was 3% — an already low margin that could disappear if prices continue to rise.

Its financial report also showed in publicly available documents Saizeriya’s stalwart performance in China slipping, with the domestic Japanese market overtaking Chinese sales for the first time since August 2021. This shift may be due to the fact that China has opened its own domestic competitors modeled after Saizeriya to compete with the Japanese chain, Miwa suggested.

Price for Saizeriya's signature Milano-style doria dish will be raised from ¥300 to ¥320. | Saizeriya / via Jiji

Despite the challenging circumstances, Saizeriya’s full forecast for 2027 predicts income gains of 21.3%. Company spokesperson Satoru Motohashi said that upcoming store openings both in Japan and abroad, as well as domestic sales that are trending upward, were responsible for the projected gain.

To keep costs as low as possible, the company “continues to pursue sourcing initiatives, such as developing new suppliers, as well as improving our supply chain,” Motohashi told The Japan Times.

Ultimately though, Saizeriya’s greatest asset could also be a potential bottleneck.

Unlike other family restaurant purveyors like Skylark — which operates a diverse roster of restaurants that include Gusto, Bamiyan and Johnathan’s — Saizeriya only sells Italian food. While that narrows down the ingredients it must procure, it also creates a challenge in that some of the needed ingredients can only be purchased abroad.

“If costs rise to the point where the company can no longer afford to procure ingredients such as olive oil, that could force changes to its menu. Those changes could, in turn, reduce customer satisfaction,” food industry analyst Miwa said.

But for now, the company seems committed to its main specialty: staying budget-friendly.

As Saizeriya CEO Matsutani said Oct. 14: “If there’s an opening to make things cheaper, I’ll take it.”