Pandemic Woes: Closures of Family Restaurant Outlets Forecast to Top 1,000 in Japan

The COVID-19 pandemic has accelerated restructuring of family restaurants in Japan, including closures of outlets and changes in business format. A recent survey by Teikoku Databank showed that, as of July 2022, 16 major listed restaurant chains were operating 8,420 family-restaurant outlets, offering casual dining for people of all ages. This was a decrease of 810 (approximately 9%) compared to December 2019, prior to the pandemic. Joyfull saw the largest decrease, closing more than 200, equivalent to 30% of its directly managed outlets.

Customers not returning to restaurants in business districts due to the spread of working from home, and the high cost of raw materials and issues with securing part-time workers and other human resources are thought to have led to the increased push for restructuring. According to Teikoku Databank, if each company’s plans for further reductions in outlets are taken into consideration, it is highly likely that, overall, there will be a decrease of more than 1,000 outlets compared with prior to the pandemic, with the number of outlets for March 2023 forecast to be approximately 8,000.

In contrast, there was a growing trend among restaurant operators to rebrand their existing restaurants by changing to different business formats. Looking at the 8 out of 16 family restaurant operators that had no specific business specialization and how the format for their total number of outlets had changed, the largest increase, by 1.2 points from December 2019, was seen in a shift to “fast food” business, such as gyūdon beef-on-rice bowls, hamburgers, and other hot snacks. This was followed by the café business style, up 0.9 points, and yakiniku barbecue, rising by 0.4 points. On the other hand, the izakaya-style format saw the largest drop, falling by 1.1 points over the same period. Demand fell significantly for izakaya pubs during the pandemic and there were notable cases of unprofitable outlets being closed, similar to the situation for family restaurants.

(Originally written in Japanese. Banner photo © Pixta.)