The popular Japanese fast food chain, Sukiya, has stirred the industry with a rare move of slashing prices on menu items. This tactic aims at boosting the volume of sales in light of the current economic climate affected by the pandemic. The story revolves around the question of whether this gamble will pay off or inevitably backfire on the company's financial sustainability.
In Japan, any change in a well-known brand like Sukiya might result in considerable cultural shock due to Japanese society's preference for stability. The timing mainly attests consumer reaction to economic pressures brought by the pandemic, wherein cost becomes a significant deciding factor. With respect to legal concerns, businesses like Sukiya must ensure their pricing strategies still conform to fair trade laws.
Much like in the US or EU, corporations occasionally make strategic decisions to lower their prices in response to economic downturns, hoping to maintain or increase market shares. However, these decisions must be tactically implemented to avoid triggering a price war. In many sectors, particularly within the fast-food industry, this could lead to an unsustainable race-to-the-bottom.