The quarterly financial results of Japan’s major sushi chains show a rebound in sales after Japanese prefectures lifted COVID-related restrictions on restaurants' operating hours and alcohol sales, which were originally imposed in October 2021.
However, profits suffered at Japan's major sushi chains as they competed to entice customers back into their shops with special deals and promotions.
All of the top sushi brands are of the casual kaiten-zushi (rotary/conveyor belt sushi) type, though some are trying to move away from this low-margin model. By both sales and number of shops the top chain is Akindo Sushiro, followed by Kura Corporation, Hamazushi, Kappa Zushi, and Genki Zushi.
Sushiro, based in Suita City, Osaka Prefecture, is a subsidiary of Food and Life Companies, which also owns other Japanese restaurant and sushi brands. The name was changed from Sushiro Global Holdings Co. in April 2021. Sushiro accounts for 626 of its parent’s 961 outlets. The fiscal year of the parent company runs through September, so its most-recent report is its Q1 2022 results, which report on its activity through December 2021.
After Japan's lifting of its state of emergency, Sushiro lowered its JPY 110 (USD 0.91 to 0.82) dishes to JPY 99 (EUR 0.91 to 0.75) and offered half-price mugs of beer. The chain has also adapted to the pandemic by offering delivery service at more of its outlets and opening new take-out only shops. The moves have attracted customers back, but reduced the company’s profits; Sales at domestic Sushiro shops rose 3.5 percent from the same period in the previous year, but its profit fell by 34 percent. Its parent company's profit dropped 17.3 percent, to JPY 3.4 billion (USD 27.7 million, EUR 25.2 million).
Kura-zushi, based in Osaka, closed its first quarter at the end of January. The company increased sales by 19.5 percent, butits operating profit fell 22.4 percent compared to the same period of 2020. However, profit attributable to the owners of its parent company jumped 190.4 percent from Q1 2020, bouncing back from a contraction of 38.6 percent year-over-year.
As a pandemic measure, the chain has implemented an online reservation system to avoid congestion in its waiting areas, as well as a touchless payment system, and it has begun covering the dishes on its conveyor belts. The company continued to aggressively open new shops during the pandemic in order to position itself to compete post-COVID. Kura-zushi has run several promotions to attract more customers, with its current special offering featuring fish from Ehime Prefecture.
Hamazushi Co., a subsidiary of Tokyo-based Zensho Holdings, operates the Hama-zushi chain. The parent company also operates the popular Sukiya beef bowl chain, as well as some lesser-known brands. Its fiscal year runs through the end of March, so its most recent report is for its third quarter ending 31 December. Unlike other chains, it increased both sales (by 10 percent) and profit (by 35 percent). Its parent company's profits swung back into the black after a loss a year prior. Same-store sales for Hamazushi were up 5.4 percent, which it primarily attributed to the lifting of the state of emergency. The chain is opening new stores and increasing take-out options.
Kappa-zushi, owned by Kanagawa-based parent Kappa Create Co., was the largest conveyor-belt sushi company in Japan until 2010, but subsequently lost ground. In its Q3 2022 report, sales increased by 5 percent, versus a 16 percent decline in the same quarter of the previous year. The company posted an operating loss of JPY 2.2 billion (USD 17.9 million, EUR 16.3 million), worse than the same period last year, in which the loss was JPY 1.6 billion (USD 12.9 million, EUR 11.8 million). Its parent company had JPY 28 million (USD 229,000, EUR 208,000) in profit in the quarter, but that figure was positive after a loss in the same period of the previous year. The company is trying to ditch the conveyor belt model to focus on higher-priced counter-service sushi restaurants.
Genki Sushi, based in Utsunomiya City, Tochigi Prefecture, issued a cumulative report for the first three quarters of its FY2022 ending 31 March. It had a profit of JPY 325 million (USD 2.6 million, EUR 2.4 million), achieving 60.2 percent of its full-year forecast. Last year, the company posted a loss of JPY 420 million (USD 3.4 million, EUR 3.13 million).
The company benefited from government subsidies for restaurants that observed early closing times and restrictions on alcohol sales as an anti-COVID-19 measure. The company aims to operate 200 stores in Japan and 250 overseas, with an emphasis on expanding its non-conveyor-belt shop model.
Photo by Chris Loew/SeafoodSource
