Photo/IllutrationCustomers at Coffee Mafia in Tokyo’s Shinjuku Ward can drink as much coffee as they like for a monthly fee of 3,000 yen. (Provided by Favy Inc.)

  • Photo/Illustraion
  • Photo/Illustraion

Whether loyalty can be bought is being tested by a growing number of restaurants, cafes and bars in Japan, where unlimited food and drinks offers are enticing customers back to the same haunts regularly.

The “subscription” services are designed to make consumers feel as if they are saving money while discouraging them from spending their cash with rival businesses.

Under the model, customers need to pay only fees for certain periods, so they can, for example, drink unlimited cups of coffee or glasses of beer for 3,000 yen ($26.72) a month, or eat all the steaks they like for 70,000 yen monthly.

One day in late June, a 38-year-old male company employee visited Yuyu, an “izakaya” Japanese-style pub with private rooms in Tokyo's Akihabara district near his company, with his colleagues.

He showed a card reading “30-day all-you-can-drink offer” to the staff. Those with the card can drink as much beer, shochu-based "chuhai" drink, and other alcoholic beverages as they want within a month for 3,000 yen.

As card holders are allowed to dine at the izakaya as many times as they like, the company worker went there at least six times in June.

“I feel the more frequently I visit here the more money I can save,” the employee said. “I do not need to pay charges for drinks, so I inadvertently order expensive meals.”

Izakaya chain operator Andmowa Co. introduced a fixed-rate alcohol offer at its 33 outlets mainly in the Tokyo metropolitan area in February.

With its service period varying from one month to six months, the most pricy all-you-can-drink offer costs 13,000 yen.

The most popular among the four types of cards of different service periods costs 3,000 yen, and a total of 273 cards were sold in March, according to Andmowa officials.

While customers naturally benefit more when they eat more frequently at the restaurants, the service also has an advantage for the izakaya operator as well.

“Sales and the number of customers have increased since the introduction of the flat-rate system,” said an Andmowa official.

The official said users of the fixed-price mechanism tend to order more dishes and more expensive food as they do not have to pay for beverages.

The subscription model was pioneered by magazines but has spread widely among various businesses. It is especially popular among online service providers that distribute software, music and videos.

With competition to lure customers heating up, restaurants and eateries of various kinds are also adopting the subscription service to differentiate themselves from other shops.

One such restaurant is Steak Roppongi in the bustling Roppongi district in central Tokyo, which allows up to 15 customers to eat a 450-gram steak on each of its business days within a month for 70,000 yen.

The Yaro Ramen chain in November last year started a service to enable noodle lovers to enjoy a bowl of ramen each day after paying a monthly charge of 8,600 yen at its outlets in the Tokyo metro area.

REGULAR CUSTOM, STABLE PROFITS

How many people visit restaurants is affected not only by whether there are rival eateries nearby but also social trends and the weather, making it difficult for operators to generate stable profits.

According to the results of a survey by Japan Finance Corp., while 10 percent of companies that were newly established in 2011 closed their businesses by the end of 2015. The closure rate was nearly 20 percent for restaurants and eateries.

The figure for the restaurant industry was the highest among other industries.

The spread of fixed-rate services is expected to enable eatery operators to secure stable profits.

Although it is said to be difficult for restaurant operators to build close relations with consumers, the flat-rate system will also help strengthen customer relationships and prevent regulars from going elsewhere.

Situated in Shinjuku Ward and the Iidabashi district of the capital, the Coffee Mafia cafes have made available an all-you-can-drink service with prices starting from 3,000 yen a month.

Users of the system visit the coffee shops more than 20 times a month on average, and some of them are on speaking terms with shop staffers.

As the cafe operator is promoting its cross-sell campaign, such as recommending regulars order meals in addition to coffee based on their past order records, per-customer spending of subscribers is higher than that of ordinary customers, according to Coffee Mafia officials.

“Restaurant operations are unstable since that type of business has only one source of revenue,” said Takumi Takanashi, president of Favy Inc., Coffee Mafia’s operator. “I want to establish a business model to produce stable profits based on flat-rate services and objective data.”

As to whether fixed-price systems will spread further in the restaurant trade, Aya Niki, an official of market research firm Fuji Keizai Co., who is familiar with circumstances facing the food service industry, said important factors are whether operators can make customers feel as if they can save money through use of their services and how they can secure easy-to-access land to enable regulars to frequent their shops.

“Efforts, such as holding events limited to fixed-rate service users, will be necessary to urge them to continue using the service,” Niki said.

(This article was written by Akifumi Nagahashi and Kenichiro Shino.)