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How the King of Affordable Western Cuisine, Salia, Succeeded

Date: 2024-03-04Views:

Powerful supply chain capabilities and efficient front-end operations have built the barriers for Saizeriya.
来源丨Harvest Jiang

Saizeriya is a magical restaurant. Every weekend, Saizeriya stores near shopping malls attract a large number of family users. "Cost-effective Western food" and "fast serving" are the first impressions given to consumers. In the economic slowdown period, studying Saizeriya's development may inspire you.

- 01 -

Saizeriya's Development

Saizeriya is a well-known chain Italian restaurant in Japan. Its main feature is high cost-effectiveness.

Founder of Saizeriya: Masahiko Masukawa

Masahiko Masukawa, the founder of Saizeriya, started working in restaurants during his university days. After graduation, he and a friend opened a Western restaurant called Saizeriya in Chiba Prefecture, Japan. The first Saizeriya was located on the second floor of a vegetable and fruit store, with only 38 seats. Due to its unfavorable location, there were no customers at all after opening. Therefore, Masahiko Masukawa thought of offering a 50% discount to attract customers, but the effect was not good. Finally, it was reduced to a 30% discount, and the price of a plate of pasta dropped to 150-200 yen.

After the price reduction, the store became popular, and the number of customers increased from 20 a day to 600-800. The turnover of the 38-seat restaurant reached 20 times a day. It can be said that Saizeriya started with a brand positioning focused on cost-effectiveness.

Thus, Saizeriya embarked on the path of chain development.

1)Saizeriya's Performance

    • Saizeriya's listed entity was established in 1973, and the company went public in 1999.
    • For the fiscal year 2022 (September 2021 to August 2022), Saizeriya achieved revenue of 144.3 billion yen (RMB 73.7 billion) and a net profit of 5.7 billion yen (RMB 2.9 billion).
    • As of February 2023, Saizeriya's market value was 238.1 billion yen (approximately RMB 114 billion), with a price-earnings ratio of about 36 times.

Saizeriya's strength lies not in its large scale or strong profitability but in its ability to maintain high-quality operations of chain restaurants in a highly competitive environment through its high-cost performance model.

2)Saizeriya Store Distribution

    • As of 2022, Saizeriya has a total of 1,547 directly operated stores worldwide.
    • In terms of store distribution, there are 1,069 stores in Japan and 478 stores in overseas markets.
    • Among overseas markets, mainland China has the most stores, with 149 in Shanghai (entered in 2003), 142 in Guangzhou (entered in 2007), and 80 in Beijing (entered in 2008).

3)Example of Guangzhou Store Data

Saizeriya's official website in Guangzhou disclosed some operational data for the Guangzhou market. According to Saizeriya's disclosed data in Guangzhou:

  • Saizeriya entered the Guangzhou market in 2008.
  • By the end of the 2021 fiscal year, the Guangzhou market contributed revenue of 660 million yuan, with 137 stores, 1,300 formal employees, 2,000 part-time employees, and an annual footfall of 19.12 million people.

After rough calculations, Saizeriya's single-store revenue in the Guangzhou region is approximately 4.82 million yuan per year, with an average customer spending of around 35 yuan.

- 02 -

Saizeriya's Pursuit of Industrialization in the Catering Industry

1)Business Philosophy

Saizeriya's business philosophy is to "enrich customers' daily lives by introducing and challenging dishes that are worth enjoying every day." It constantly strives and experiments to find the best balance between delicious food and cost-effectiveness, continuously creating value for consumers. In short, it provides consumers with quality-assured, extremely cost-effective dishes.

2) Saizeriya's Business Model

Every operation of Saizeriya points to "high quality" and "efficiency," gradually forming a complete closed-loop industrial chain. Saizeriya's ability to provide consumers with extremely cost-effective products is based on its long-term investment in the supply chain and its pursuit of the industrialization of the catering industry.

3)Saizeriya's Pursuit of Industrialization in the Catering Industry

Although Saizeriya is a chain restaurant brand focused on cost-effectiveness, its inherent philosophy is the SPA model promoted by Uniqlo, "connecting production to terminal sales." Specifically, Saizeriya aims to establish its own directly operated store network and manage various key nodes in the entire industry chain, including dish development, ingredient production, processing, and distribution. This concept has been established since Saizeriya had only a dozen stores and has been put forward as Saizeriya's "60-year vision" – opening 1,000 directly operated stores and establishing its own production and sales system within 60 years.

Saizeriya's production and sales system are the foundation of ensuring the extreme cost-effectiveness model. Under this system, Saizeriya can effectively control the quality of ingredients and meal quality while reducing costs and expenses at various stages of the supply chain. Although Saizeriya self-assesses that its research on seeds, soil, cultivation methods on its own farms, the construction of its own factories overseas, and the overall logistics system are still in a relatively early stage, Saizeriya has always been striving to connect the industry chain from its stores to the source, achieving true industrialization of catering.

4)Direct Sourcing and Self-Built Factories

Achieving direct sourcing from the source and establishing factories at the production site to build a complete self-owned supply chain system is an important strategy for Saizeriya to achieve industrialization and reduce overall costs.

Saizeriya started importing wine from Italy when it had only dozens of stores. In 2000, it opened its own factory in Australia, purchasing beef and dairy products, and producing core products such as hamburger patties and Doria (creamy baked sweet potatoes) sauce locally.

5) Total Cost Control Philosophy: QCDES Model

Saizeriya's cost control in the supply chain is not only about controlling procurement costs but also focuses on the total cost of the entire delivery process. It emphasizes controlling the quality of raw materials in the pre-sequencing stage to minimize the increase in silent costs associated with the advancement of production processes.

Saizeriya's own factories adhere to QCDES requirements in production. Among them, compared to costs and delivery dates, Saizeriya pays more attention to quality, environmental protection, and safety.

Saizeriya's "total cost control" philosophy is specifically manifested in identifying quality issues in the pre-processing stages and dealing with them regardless of cost. Saizeriya believes that addressing quality issues at the initial stages is more effective than discovering problems in later processes, thereby reducing overall costs.

- 03 -

Saizeriya's Store Operation Rules

1)Competitor Store Research

Saizeriya attaches great importance to market research from top to bottom and considers McDonald's the most worthy company to study in the chain restaurant industry. Therefore, when developing a new store, Saizeriya's new store development team visits McDonald's stores in the same area to understand the number of customers and their flow.

Selection of Research Targets:

  • Choose stores with different operating styles from Saizeriya to understand the differentiation.
  • Investigate best-selling products in large convenience stores and supermarkets to understand consumer preferences.
  • Preferably research chain stores larger than Saizeriya, where accumulated improvements and standardization likely showcase essential elements according to consumer perception.

Research Target Sub-item Focus:

Develop 100 sub-items for each of the four aspects, including specific and quantifiable elements like store entrance layout, walls, flooring, lighting, electronics, and staff uniforms.

Recording Reasons for Sub-items:

Understand the reasons behind each sub-item, differences in practices compared to Saizeriya's, and establish a cause-and-effect relationship.Internalize the reasons without necessarily confirming them with the research subject, as interpretations might differ.

Develop short, medium, and long-term improvement plans based on the results of the analysis.

Regular Visits to Research Subjects:

Periodically visit research subjects, noting changes among hundreds of sub-items. In-depth understanding of subtle changes enables insights into trends across different periods.

2) Saizeriya's Store Location Preference:

  • Tends to favor the outskirts of good business districts.
  • Prioritizes cost in store decoration, often reusing existing hardware and even soft furnishings to reduce initial investment for new stores.


Saizeriya's primary focus during store expansion is Return on Investment (ROI), with a target ROI of 30% for selecting new locations. To ensure a store's profitability, Saizeriya leans towards controlling the initial investment costs.


3)Principles for Achieving ROI Standard:

Saizeriya's primary focus during store expansion is Return on Investment (ROI), with a target ROI of 30% for selecting new locations. To ensure a store's profitability, Saizeriya leans towards controlling the initial investment costs.

ROI Calculation:

  • ROI = (Profit / Investment) * 100%


  • Principles for Achieving ROI Standard:

    • Avoid blind investments, minimize equipment costs wherever possible (often reducing half of the required costs for internal decoration, kitchen utensils, etc. for new stores).
    • Control store rent costs by choosing locations with lower initial investment and lower rent to enhance store resilience.
    • Ideal locations are those where there are no other popular restaurants within a 15-minute walking distance or no mid-to-high-end individual restaurants in the same price range.

  • 4)Store Expense Allocation

    Saizeriya believes that 80% of the taste of a dish depends on the quality of ingredients, 15% on the chef's skills, and 5% on the store's treatment of ingredients. Therefore, sufficient costs should be allocated to ingredients to ensure quality, with profits reinvested in consumers for long-term store operations.

    Key Points in Ingredient Storage:

    • Temperature during ingredient storage.
    • Humidity during ingredient storage.
    • Transportation time from harvesting to the store.
    • Bumps during ingredient transportation.

    Allocation of Gross Profit for Quality Stores:

    • Saizeriya aims to maintain a gross profit margin of around 60%.
    • 40% of gross profit goes to "labor costs" (including training costs), and the remaining 20% each is allocated to "real estate-related expenses" (including depreciation of equipment investment) and "other expenses" like utilities.

    Expected Net Profit Margin:

    • With a 60% gross profit, a reasonable net profit margin for a store is approximately 12%.

5)Store Manager Assessment Method

In a society with many temporary workers, Saizeriya considers optimizing temporary staff allocation based on accurate customer flow forecasts and minimizing store labor costs as an essential skill for store managers.

Store Manager Responsibilities:

  • Responsible for developing the store's work plan, predicting customer numbers based on past turnover changes, and creating a roster based on actual staff conditions.
  • Identifying cost reduction opportunities in store operations and continuously optimizing them.

Principles for Business Plan Formulation:

  • Establish quantifiable indicators that must be achieved rather than setting expectations.
  • Clearly define goals accepted by the individual being assessed, and manage the process well to clarify individual responsibilities.

6)Menu Design Philosophy

Saizeriya draws inspiration from retail store selection strategies to categorize menu items into three types based on different positions: 60%, 30%, and 10%. The emphasis is on quality over quantity in terms of both menu items and ingredients used.

Saizeriya's Menu Categorization:

  • Flow-Inducing Items (60%): Popular dishes like Bolognese Pasta and Garlic Escargot, attracting consumer favor.
  • Mainly-Promoted Items (30%): Seasonal new products, which, if popular, can be shifted to the flow-inducing category.
  • Essential Items (10%): Staple items like Squid Ink Spaghetti, essential for maintaining Saizeriya's identity as an Italian restaurant.

Focus on Core Products:

  • Saizeriya concentrates on building "core products" to reduce waste and increase profitability through operational efficiency.

Importance of Ingredient Quantity over Dish Quantity:

  • Controlling the number of ingredients is crucial to reduce waste, improve efficiency, and increase profits. This allows Saizeriya to lower prices, feedback a portion of profits to consumers, increase customer numbers, and create a positive cycle.

7)Saizeriya Pricing Principles

Saizeriya's pricing principle is to eliminate consumer stress caused by uncertainty about how much they will spend. Prices between the cheapest and most expensive items are controlled within a 2x difference, ensuring customers can comfortably choose dishes while pursuing overall cost-effectiveness.

- 04 -


In summary, Saizeriya, as a successful chain restaurant, has achieved remarkable results through its cost-effectiveness model and the pursuit of industrialization in the catering industry. Its focus on quality, efficiency, and a complete closed-loop industrial chain has set it apart in the highly competitive restaurant market. The combination of a standardized menu, efficient supply chain, and a commitment to social responsibility has contributed to Saizeriya's success and its continued expansion plans in the global market.

Disclaimer: This information is based on publicly available sources and should not be considered as financial or investment advice.



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