A 43% Cost Ratio But Still Profitable... The Formula Behind Japan's Conveyor Belt Sushi Chains

COGS for Ordinary Restaurants at 35%, but Conveyor Belt Sushi Chains at 43%
Hamasushi Invests KRW 63.1 Billion in Made-to-Order System
Kura Sushi Cuts Waste Rate to 3% Through Data Analysis

Japan's major conveyor belt sushi chains have drawn attention for their ability to achieve stable profits despite carrying a cost-to-sales ratio nearly 10 percentage points higher than that of ordinary restaurants.

Image of sushi to aid in article understanding. Pixabay

On August 19, the Japanese TBS-affiliated news site TBS NEWS DIG summarized the contents of its podcast "Komugiko," released on August 10, to analyze the revenue structure of the conveyor belt sushi industry. According to a 2025 survey by the Japan Finance Corporation, the cost of goods sold (COGS) ratio for ordinary restaurants stands at 35%, while FOOD & LIFE COMPANIES, which operates Sushiro, reports 43%, and Kura Sushi comes in at 43.9%. The industry-wide average, including regular sushi restaurants, is also high at 41.1%.

The challenge lies in the difficulty of raising prices. Because the industry has traditionally used a low-cost strategy to grow the market, the perception that “conveyor belt sushi is cheap” has become firmly established among consumers. As a result, the industry has focused not on changing the purchase price of ingredients, but on reducing waste from unsold sushi and eliminating unnecessary operational costs at stores.

Previously, stores operated by preparing sushi in advance, estimating customer numbers. Sushi that went around the conveyor belt for several rotations without being picked up would end up as waste. Given the nature of the business, which handles mostly seafood, leftovers could not be carried over to the next day, resulting in daily losses.

The solution these companies adopted was to switch to a made-to-order model, preparing sushi only after an order is placed. Kappa Sushi now operates all 299 of its locations with this system. Hamasushi implemented a “straight lane” system at 657 out of its 681 stores, delivering sushi directly to customers upon order. The company invested approximately 7.2 billion yen (about KRW 63.1 billion) to install these straight lanes, and expects to reduce food waste by about 1,100 tons annually. Sushiro, too, has stopped placing unsold sushi on the conveyor belt since 2023.

Kappa Sushi began reducing the number of conveyor lanes around 2015, and Hamasushi introduced related systems around 2016. This approach was intended to strengthen hygiene management while simultaneously reducing food waste and store labor burden. Among the four major chains, Kura Sushi remains the only one that still uses conveyor belts in all its stores.

Kura Sushi, which has retained its conveyor belts, uses data to minimize waste instead. By attaching codes to each plate, it tracks how long items remain on the belt and cross-references this with the number of customers and ordering trends by time and menu to determine production quantities. After introducing this system, the company’s food waste rate fell from over 12% to about 3%.

Sushiro Japan store image. Official website

The operating methods refined in Japan have returned even greater profits in overseas markets, where sushi prices are much higher. Although the number of overseas outlets is less than half that of Japan, operating profits have surpassed domestic figures. Sushiro's overseas business operating margin is around 12%, nearly double the 6.8% seen in Japan. At Kura Sushi's U.S. locations, one plate of conveyor belt sushi sells for an average of $3.80 (about KRW 5,300), which is more than three times higher than the 120–150 yen (about KRW 1,050–1,320) charged per plate in Japan. This pricing gap directly translates into higher profits.

Hirosugu Ogawa, an executive at FOOD & LIFE COMPANIES, explained in a Nikkei Business interview that the key to overseas business success is “bringing the fundamental aspects—such as store operations and structure—developed in Japan and layering local elements on top.”

This content was produced with the assistance of AI translation services.