What do you get when you place a Chinese chef in a Chinese restaurant?
Sushi
Where are we going? To why the Chinese make sushi.
Sushi Prices
Second to India and ahead of Mexico, the number of new Chinese immigrants has soared:
Chinese immigrants who look for restaurant industry jobs associate Chinese food with cheap lunches. At the same time, the price of Japanese cuisine has skyrocketed. As a result, many Chinese chefs and their staffs have switched from Chinese cooking to Japanese food.
Marketing research firm IBISWorld reports a 3.3% annual jump in sushi revenue from 2011 to 2016. Comparing cuisines (below), you can see where that revenue came from:
Similarly, Japanese restaurants are among the most expensive in NYC:
Our Bottom Line: Monopolistic Competition
The Sporkful called it “coding.” By coding they meant the explicit and implicit signals that restaurants send to diners. For Japanese restaurants, the signals include an ethnic identity that relates to healthy food and affluence.
Composed of many small units, the sushi restaurant industry is monopolistically competitive. It has pricing power because of the signals it send to customers and Chinese chefs.
My sources and more: For a history of Chinese immigration, I suggest NPR and the Migration Policy Institute. Much more enjoyable, the Sporkful had a series on how restaurants signal. Lasting 4 podcasts and 2 hours, the series took me to Asian food and Japanese restaurants. However, if you still want to read more, the Atlantic, Wonkblog and Quartz are possibilities.
