These Are the Most Expensive U.S. Cities, Based on Sushi Prices
(Bloomberg) -- Rich coffee may be a perk of living in Seattle, but good sushi is going to cost you.
Seattle rolled past Los Angeles, Miami and San Francisco to become the second-most-expensive U.S. city for sushi -- behind only New York -- as restaurant prices surged more last year in the birthplace of Starbucks than in any of the 25 business centers surveyed for Bloomberg’s annual Sushinomics Index.
The gauge is based on average prices of California and spicy tuna rolls -- two of the most iconic Americanized imports of Japanese cuisine -- with data compiled from websites including Yelp, OpenTable and Menuism, as well as Bloomberg’s own surveys of restaurants.
The index is a proxy to measure changes in a city’s demographics, spending power, business growth and influx or outflow of wealth.
This year, the basic combination cost an average $8.87 in the Big Apple and $8.39 in Seattle, compared with a nationwide average of $7.14. Los Angeles dropped out of the top three for the first time since the introduction of Sushinomics in 2011, with prices rising less than one percent from a year earlier.
New Orleans remained the cheapest city at $5.53, followed for a second straight year by Wilmington and Columbus, Ohio.
Seattle, Amazon’s home, had the highest sushi inflation at 6.7 percent. San Francisco and Phoenix, where technology services are also helping drive economic growth, were next on fish-and-rice-roll inflation. That may be a warning to sushi loving city planners hopeful that Jeff Bezos chooses their city as the site of Amazon’s second headquarters.
How Fast Do Sushi Prices Rise?
Like any product, sushi prices are a component of inputs. That includes the availability of bluefin tuna, salmon or shrimp, as well as the costs of transportation, storage, rent and skilled labor.
But a comparison of prices among cities offers more than a glimpse into overall consumer prices and salaries of fishermen and restaurant staff, it provides insight into local demographic trends that influence restaurant openings and offerings in various cities.
By most reports, Los Angeles was the first American city to embrace traditional sushi about 50 years ago. Sushi bars then followed in places such as New York and Chicago. Over time, jumbo rolls emerged, with tuna and salmon sometimes being replaced by less-expensive ingredients such as avocado, mayonnaise and sweet-and-spicy sauces to expand the market.
"We continue to see an uptick in sushi sales, which is great to see, given that sushi on average has a lower food cost than items from our scratch kitchen," said Berke Bakay, chief executive officer of Kona Grill Inc., on an earnings call earlier this year. Kona Grill is based in a suburb of Phoenix and operates more than 40 restaurants, many in non-coastal metropolitan areas such as Denver, Minneapolis and Columbus. On a subsequent call, Bakay said most of the under-performing outlets "are in tourist locations."
Whatever the local pricing, the sushi market -- at least rolls that include high-grade fish and seafood -- faces a variety of challenges including over-fishing and climate change.
"The sustainability of fisheries is an urgent concern," said Darian McBain, global director for sustainability for Thai Union Group Pcl, which owns the Chicken of the Sea and John West brands, and has a stake in Red Lobster restaurants -- though it has minimal activity in the sushi supply chain. "It is vital more fisheries meet Marine Stewardship Council standards to help ensure sustainable fish stocks, minimized environmental impacts, and improved management," he said in an email.
One way of keeping prices down is to minimize restaurant staff. In the sushi capital of the world, Japan, there are now about 4,000 "conveyor-belt" sushi restaurants with combined revenue of $6 billion, according "Japan’s Top Inventions," broadcast on NHK World Japan in May. The documentary also showed how robots are being increasingly used to "replicate the hands of a sushi chef."
Tracked separately among the same eateries, premiums roll prices are gauged by the two costliest items often seen as the anchoring items in the signature house specials portion of a menu.
Tracked separately among the same eateries, premium roll prices are gauged by the two costliest menu items.
READ MORE: 2018 Bloomberg Sushinomics Index
READ MORE: 2018 Bloomberg Sushinomics Prices
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