Existing Store Growth
Promoting Brand Conversion and Store Remodeling in Line with Changes in the Market Annual Average Sales Growth of 3–4%
For existing store growth, we will convert brands and remodel stores in line with changes in the market. In our menu strategies, we will capture wide-ranging motivations for store visits, develop menu plans and promotions that enhance the value of the dining out experience, and pursue increases in guest count and average check. To carry out pricing commensurate with service and product value in an inflationary environment, we will continue our efforts to enhance the quality of our products and services, with the aim of annual average sales growth of 3–4% at existing stores (Avg 1% guest count growth per year; Avg 2-3% average check growth per year)
Brand conversions
Skylark Group does not perform brand conversions simply to improve the revenue of a single store. Our strength lies in brand conversions with careful calculation of impacts on other Group stores in the area to maximize revenue for the area. In 2023, we carried out brand conversions at 41 stores, with an impact of about +46% on sales. In the first quarter of FY2024, we carried out brand conversions at 27 stores, with an impact of +38.6% on sales, plus a de-cannibalization impact of +10.5%. This contributed to increased revenue for the areas encompassing the converted stores and neighboring stores.
Sales impact and de-cannibalization effect of conversion
| FY |
Sales impact |
De-cannibalization impact |
Number of stores |
| 2023 |
+46.0% |
+6.6% |
41 |
| 2024 |
+38.6% |
+10.5% |
27 |
Results at converted stores by brand (FY2023)
| Conversion brand |
Ratio of sales to pre-conversion sales |
Number of stores |
| Tonkaratei |
130.5% |
10 |
| Musashinomori Coffee |
172.5% |
6 |
| Syabu-Yo |
183.5% |
5 |
| La Ohana |
161.4% |
5 |
| Gusto |
162.3% |
1 |
Newly developed brands
(Tohsai, Hachiro Soba) |
136.6% |
14 |
Example of de-cannibalization through brand conversion
Strategic thinning out of regional Gusto stores (Hachinohe, Aomori)
We aim to improve profit by converting one Gusto store into a Syabu-Yo store, eliminating cannibalization of a nearby Gusto store
Promotion of store renovations (remodeling)
For each brand, Skylark Group undertakes design renovations tailored to the needs of the times, with store signboards, guide signs, and exterior designs that enhance store visibility.
In fiscal 2023, we renovated 104 stores, mainly Gusto and Bamiyan stores, with a sales impact of +4.6%. In the first quarter of 2024, our renovation of 13 stores has had a guest count impact of +5.9%, for which we estimate a sales impact of about 300 million yen for 70–80 stores over the course of a year. Over the next three years, we plan to increase guest count through the renovation of an average of 300 stores per year.
Pricing tailored to the inflationary environment
Amid an environment in which raw materials, utility costs, and logistics costs have soared in recent years, Skylark Group will continuously increase the average check through the setting of price ranges commensurate with service and product value and through the proposal of menu compositions matched to customer needs.
At Gusto, a brand that we operate nationwide, we have introduced a four-region pricing scheme, taking into account region-specific rent markets and prices of goods: Super Urban, Urban Area, Regional City A, and Regional City B. To meet diversifying consumer lifestyles and consumption trends, a more subdivided method is essential. We are working to improve profit through a strategy of finely detailed prices that are not uniform nationwide.
In our menus, we expanded the variety of affordable small dishes at Gusto, Bamiyan, and Jonathan’s restaurants in our autumn 2023 Grand Menu revision. Providing good value-formoney in our menus and the enjoyment of choosing menus yielded increases in number of dishes ordered and number of alcoholic drink orders, boosting average check.
Topical Marketing
We attract store visitors by actively developing menus and sales promotions that enhance the value of the dining out experience, such as Gusto’s first Offal Hot Pot Fair supervised by famed offal hotpot restaurant Yamaya in January 2024;our Bamiyan Taiwan Fair in collaboration with a Taiwanese company; and cross-brand promotional campaigns featuring the popular Spy Family animation. We will make full use of such topical marketing methods to boost guest count and average check.
