Business Profile, Journalism 325 (Magazine Writing), April 12, 1998
A gleaming, stainless-steel conveyor belt system dominates the center of Sushi No Ka Oi, a small sushi restaurant that quietly opened at Puck's Alley in mid-February. A bookshelf stereo in the corner plays commercial-free pop music to a lone employee, who is busy wiping down one of several empty tables.
Shuichi Sudo, the owner, comes out of the kitchen for a break. It's nearing dinnertime on a Monday, and the place is empty.
"I've worked in restaurants before, and they went out of business a lot," he says. "I know how difficult it can be."
His attention is drawn to the door, as a passer-by pauses to peer inside. But only for a moment. She looks up to read the sign, then continues down the street.
"I was looking to start a business here -- any business," Sudo says. "This style of conveyor-belt sushi is popular in Japan, and sushi is very popular here."
He says he's set a December deadline for the restaurant to start turning a profit. Unfortunately, he faces an uphill battle.
According to the Small Business Association, more than 80 percent of new businesses fail within six years. And the restaurant industry has the highest failure rate of any other, surpassing publishing by a wide margin.
Locally, some ventures are successful, and even a few -- like Sam Choy's family of eateries -- are currently expanding. But overall, the restaurant industry has been hurt by the same weak economy that afflicts the entire state.
Bankruptcy filings reached record highs in 1996 and 1997, and show no sign of slowing down. In the first quarter of last year, local restaurant giant Pacific Food Services, Inc. filed for Chapter 11 protection, announcing that it was $1.7 million in debt. TransPacific, which once owned Hawaii's Yum Yum Tree and Jolly Roger eateries, followed suit less than a month later.
And according to the State Department of Business, Economic Development and Tourism, total sales at Hawai'i eateries dropped seven percent to between 1993 and 1994, the last year specific figures were compiled.
Ironically, a substantial portion of the state's economy depends on restaurants, estimated to be a $1.8 billion industry despite falling profits. The SBA's economic profile of Hawai'i lists eateries as the single largest small business employers in the state.
Sushi No Ka Oi, not yet two months old, employs only 11 people, all of them part-time. Sudo both manages the restaurant and works in the kitchen seven days a week. He says if he gets a day off, sleep is what he wants most.
It's a small operation. But Sudo says he thinks he can beat the odds.
"Sushi is usually expensive -- in Waikiki it can cost $50 a person," Sudo explains. "Here it's affordable, and with this [conveyor belt] system you can easily figure out how much it will cost."
The menu explains the colored-plate pricing system, ranging from $1.20 to $3.80 a plate.
Sudo says the average cost of a meal for two at Sushi No Ka Oi is about $18.
"My idea is if some person comes to eat dinner with a $10 bill, he will go home with change," he says.
His location at the corner of South King Street and University Avenue is also part of his strategy. Sufficient parking was one of his top priorities, and he says he searched for six months before deciding on the Puck's Alley storefront. Sudo says he's looking to attract neighbors and local residents over Japanese visitors, and hopes to see UH students as well.
The local slant is clear in the menu. In addition to the standard sushi shop fare, a couple of other items stand out. Sushi No Ka Oi serves up sushi topped with poi and ahi poke, Portuguese sausage, or Mexican refried beans.
Several thick Spam musubi also ride dishes around the restaurant.
"You have to have a specialty," Sudo says. "Otherwise, everywhere the sushi is pretty much the same."
Sudo says it took $200,000 to open the restaurant. $50,000 went toward the conveyor-belt system, which had to be custom designed for the property. It took an additional $20,000 just to ship it from Japan.
He only recently began spending some of his advertising budget, placing about $1,200 in ads in local newspapers. He says he's seen a fair response from advertising, but a good portion of his business comes from word-of-mouth and people walking by.
"They'll come in and ask, 'When did you open?'" he says. "Lots of times they stay and eat."
The dire projections for restaurants don't faze Sudo.
"People have to eat," he says, matter-of-factly. "As long as the quality and price is good, you can make it."
Sudo also doesn't seem bothered by the mostly-empty shop (as half a dozen customers have come in since the doors opened at 5 p.m.), noting that he easily sees more than a hundred customers a night on weekends. And some of them are already regulars.
"This place makes the most onolicious Hawaiian sushi," says Nathan Yuen, a UH employee who has been eating at Sushi No Ka Oi at least once a week almost since it opened. He describes the poi and ahi poke sushi, one of his favorites.
"It's made in the nigiri style," he explains, sounding like a true connoisseur. "A piece of nori is placed around the edges of a block of rice, forming a little border on top. Then a thick viscous poi is poured within the edges of the nori, which is then topped-off with the most incredibly delicious ahi poke!"
"That buggah was so ono, I no could resist and wen ordered four!"
Sushi No Ka Oi, 2600 S. King St. (Puck's Alley), 946-8789. Open for lunch 11 a.m. to 3 p.m. and for dinner 5 p.m. to 10 p.m. Monday thru Friday, 11 a.m. to 10 p.m. Saturdays and Sundays.
![[ Sushi ]](pictures/sushi.jpg)
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