Japan’s ‘izakaya’ dining bars, wedding halls feeling COVID pinch

By Leika Kihara

TOKYO (Reuters) - The number of Japan’s “izakaya” dining bars that went bankrupt hit a record high in the year that ended in March, a sign some service-sector firms are being left behind even as the economy emerges from the shock of the coronavirus pandemic.

A rebound in global growth and domestic consumption has helped the world’s third-largest economy recover from the doldrums, with business confidence improving to pre-pandemic levels in the first quarter.

But industries that had been hardest-hit, such as restaurants, are likely to remain under pressure as Japan plans to place Tokyo under a new, month-long “quasi-emergency” state to combat surging COVID-19 cases.

A total of 175 “izakaya” bars - a mainstay of Japanese working culture and late-night drinking - went under in fiscal 2020, up 17% from a year ago and the highest level since compable data became available two decades ago, think tank Tokyo Shoko Research said on Friday.

“People stayed away from the bars to avoid crowds. Small restaurants are also suffering from the cost of investing in equipment to prevent the spread of the virus such as partitions,” Tokyo Shoko Research said.

Operators of wedding halls also took a hit as people refrained from hosting big banquets, with nine of them going under in fiscal 2020, increasing for the second straight year, Tokyo Shoko Research said.

A separate government survey showed that while service sector sentiment improved in March, an index gauging the outlook worsened on concern over a resurgence in infections.

“Japan’s economy as a whole is recovering from the pandemic’s hit. But industries offering face-to-face services are being completely left behind,” said Taro Saito, an economist at NLI Research Institute.

(Reporting by Leika Kihara; Editing by Kim Coghill)

FILE PHOTO: A staff member of an Izakaya, a Japanese-style dining bar, prepares to close around 20:00 local time, amid the coronavirus disease (COVID-19) outbreak, in Tokyo, Japan February 2, 2021. REUTERS/Issei Kato/File Photo

FILE PHOTO: The chef of an izakaya, a Japanese-style dining bar, prepares to close around 20:00 local time next to sake bottles, amid the coronavirus disease (COVID-19) outbreak, in Tokyo, Japan February 2, 2021. REUTERS/Issei Kato/File Photo