Japanese sushi-train restaurants eyes overseas expansion as local demand falls
Rising prices and other factors are the cause of the fall in demand, according to an analyst.
Japanese kaintenzushi restaurant chains or conveyor-belt sushi chains are aiming for global expansion as rising prices and other adverse economic conditions affect demand in their home market, GlobalData revealed.
Some sushi restaurant brands such as Sushiro and Kura Sushi already have plans to boost their international presence to offset the slowdown in domestic business, Suneera Joseph, Consumer Analyst at GlobalData said.
“The sushi chains plan to open new outlets in the US, China, and other Asian markets whose cuisines share similarities with traditional Chinese food. Sushiro plans to open about 60 new outlets overseas, compared to 20 planned for its domestic market, by September 2023. Similarly, in line with its global expansion plans, Kura Sushi intends to open 400 overseas outlets by 2030, with its first eatery planned in China in 2023,” Joseph said.
Joseph said this was because sushi chains in Japan were impacted by slowing domestic growth, fueled by rising prices and weak consumer spending. As they mainly rely on imported seafood, a weakening Japanese Yen and increased ingredient cost significantly impacted their business. Most sushi chains were forced to raise menu prices or risk profit erosion. Due to rising living costs, Japanese consumers are also cutting down on their discretionary expenses.
According to GlobalData’s Q4 2022 consumer survey, 52% of Japanese consumers are extremely concerned about the impact of rising prices on their personal financial situation, compared to 45% in Q3 2022.
“Facing fierce competition and razor-thin profit margins in the home market, sushi chains are exploring international expansion as part of their growth strategy. The expansion plans are also being driven by the revival of consumer footfall at food service outlets after the lifting of COVID-19 restrictions,” Joseph said.
