This is an English adaptation of a FoodBud historical article originally published on August 29, 2022.
FoodBud reviewed Saizeriya, Japan’s benchmark low-price Western-style restaurant chain, as a case study in scale, efficiency, and international expansion. At the time of the article, Saizeriya’s market capitalization was about RMB 6.7 billion.
For the six months ended February 28, 2022, covering the first half of Saizeriya’s fiscal year from September 1, 2021 to February 28, 2022, the company reported consolidated net sales of RMB 3.46 billion and net profit of RMB 250 million. Saizeriya projected FY2022 net sales, for the year ending August 31, 2022, at RMB 7.4 billion, up 17% year on year.
During the half-year period, Saizeriya’s net revenue in Japan was roughly twice that of its international markets. Outside Japan, its key regions were Australia and Asia. In China, the business was organized around three operating centers: Shanghai, Guangzhou, and Beijing.
Saizeriya’s international expansion remained company-operated. The chain opened its first mainland China store in Shanghai in 2003, established Guangzhou Saizeriya in 2007, and then Beijing Saizeriya in 2008.
In Asia outside Japan, the Shanghai-centered market was the largest:
Saizeriya’s average spend per customer reached its highest level in the company’s past five years of half-year data in FY2022 Q2, at RMB 37.1. The Japan market was slightly higher at RMB 38.45, while international markets averaged RMB 34.6. That pricing put Saizeriya close to the cost of a fast-food meal.
As of February 28, 2022, Saizeriya had 1,556 stores globally. Over the prior year, it opened 38 stores and closed 54 in Japan. Outside Japan, it opened 58 and closed 34, resulting in a net addition of 8 stores globally.
Saizeriya’s full name is Saizeriya Italian Restaurant. It began as a low-price family-style Western restaurant with just over 30 seats in Chiba Prefecture, Japan.
In its early days, a young Tokyo University of Science student worked part-time at the restaurant while studying physics. He later rose from temporary worker to senior employee. In 1968, Saizeriya Co., Ltd. was established, and that former student, Yasuhiko Shogaki, became president. He would later lead Saizeriya’s expansion to 1,556 stores worldwide.
In the late 1980s, as Japan’s postwar economy boomed, Italian fashion and cuisine became popular. Saizeriya repositioned around Italian food. Shogaki believed that products could sell under a low-price strategy and cut menu prices by 70%. That combination of speed, quality, and affordability became the basis for Saizeriya’s mass-market appeal.
A Japanese variety show once summarized Saizeriya’s low-price formula as efficiency, efficiency, and more efficiency.
The chain’s serving speed is a key example. Saizeriya has claimed that there is not a single kitchen knife in its restaurant kitchens. Store-level cooking work is minimized; anything that can be centralized is shifted to central factories for scaled processing.
Central kitchens enabled chain expansion, and Saizeriya then pushed further upstream into supply chain control. It built farms for vegetables, production and logistics bases, and semi-finished-product processing plants in different regions. By participating across the supply chain, Saizeriya reduced intermediary costs and improved product consistency. For example, the white sauce used in its doria rice dishes came from Saizeriya’s own dairy plant in Australia.
Labor productivity was another focus. Saizeriya used a mix of full-time and part-time workers, recruiting part-timers from groups such as workers, students, and homemakers without requiring prior experience. A key metric was sales per labor hour, calculated as total revenue divided by total labor hours.
The company also maintained a department focused on scientific work methods, eliminating wasted time, and reducing costs. Examples included specially designed mops that dispense water automatically, prescribed U-shaped mopping paths, skipping trays so servers could carry more dishes by hand, collecting empty plates on the return trip to the kitchen, and developing salad dressing that does not separate, saving the few seconds otherwise spent shaking it before use.
Most Saizeriya stores were located in high-traffic malls or near residential communities with convenient access. However, the chain generally avoided the most expensive prime units. It preferred less prominent mall locations or second- and third-floor street-facing sites, where rents were lower.
After the pandemic, Saizeriya was upgrading and optimizing stores in China, including launching selected premium-format stores. Based on the financial data reviewed by FoodBud, Japan appeared to be nearing saturation, with relatively weak growth momentum. Outside Japan, Saizeriya’s main focus remained China.
At the time, Saizeriya had 1,079 stores in Japan and 477 international stores. In the six months ended February 28, 2022, most international expansion was concentrated in China: 10 new stores in Shanghai, 13 in Guangzhou, 4 in Beijing, and 3 in Hong Kong.
As of February 28, 2022, Saizeriya had 152 stores in Shanghai, 136 in Guangzhou, 85 in Beijing, and 57 in Hong Kong.
Note: revenue forecasts, market capitalization, profit figures, and store counts are historical figures from the 2022 source article.