usatoday24
If you like the animeJapanese cinema or you have simply had the enormous fortune to visit Tokyo or any other city in Japan, it is quite likely that you have seen one or another izakaya. The name may not ring a bell. Your image for sure yes. Typical bars where you can drink beer or sake with office colleagues while devouring chicken skewers, plates of sashimi or bowls of edamameThere are few places more iconic in Japanese gastronomy.
The problem is that tradition is not necessarily synonymous with success. The izakaya They may be emblematic, but they are going through hard momentswith its highest level of bankruptcies in the last decade (at least) and a large part of the stores that still exist, recognizing economic difficulties.
Good story, bad data. If each city has its own urban landscape, made up of unmistakable symbols, in Japanese cities one of those iconic pieces are the izakaya. There are many. And with a long tradition. There are even different types: robotayaki, yakitor-ya, oden-ya…depending on their characteristics and specialization.
Neither its long history nor its roots have freed hundreds of izakayas to close its doors for the last two years. In 2023 they declared 204 bankruptcies and, in the absence of definitive data for the exercise, between January and November 2024, 203 were registered, which indicates that in all likelihood it has been their toughest exercise since at least 2010.
More closures than with COVID-19. The data collected by Teikoku Databank are certainly devastating. That between January and November of last year 203 izakayas If they declared bankruptcy, meaning that they accumulated debts exceeding ten million yen, about $64,000, it is a bad sign for several reasons. To begin with, it is the highest figure during that period since at least 2010, when 115 were counted bankruptcies from January to November.
Furthermore, the balance as of November 30, 2024 was practically identical to that of the entire 2023 financial year, which means that in all likelihood the year closed with a higher balance. There would be a third reason why the statistics of Teikoku are worrying: the bankruptcies of 2023 and 2024 far exceed those recorded in 2020, probably the year most affected by the COVID pandemic. During that year, 189 succumbed to economic asphyxiation. izakayas.
Does it affect everyone equally? No. Family businesses, which can be equated to microenterprises or small or medium-sized businesses, suffer the most. The diary The Manichi remember that of the 203 izayakas bankrupt between January and November of last year, around half (100) were establishments with a capital of less than one million yen, $6,400. Another 86 had a capital between one and ten million yen, which did not exceed $64,000.
What does this data mean? That not all izayakas They seem to be suffering equally. The Mainichione of the most relevant newspapers in Japan, even talks about a “clear gap” between small establishments and those in the hands of chains. One of them, Watami Co.has even shown signs that it is doing better than other years: reservations for the December holidays, closely related to income, were between 10 and 20% higher in 2024 than in 2023.
“Survival of the fittest”. reading What they get from Teikoku Databank is clear: “Medium, small and micro businesses have limited options when it comes to adopting countermeasures and the current situation is accelerating the survival of the fittest within the industry.” izayakasomething that was difficult to see during the pandemic.” However, there would be two worrying indicators for the sector.
Its economic weight seems to have shrunk in a short time. At the end of last year it was estimated that the izakayas reached an estimated size of 10.6 billion dollarssignificantly above the 5,680 to which it was reduced in 2021, during the pandemic, but still far from the levels at which it was moving before COVID-19 entered the scene. During fiscal year 2017, it is estimated that this value was around $12.1 billion.
The scenario is not flattering either. A considerable percentage of those responsible for izakayas (about 40%) have recognized that during fiscal year 2023 they went through economic difficulties, which leaves out the possibility that there are more businesses that are headed to ruin.
And what is the reason? Reasons rather. that the izakayas seem to be going through a “lean season” can be explained for several reasons. Some of a general nature, related to the economic context, and others more linked to its culture and business model. Among the first, the demographic drift from Japan, inflationthe increase in the cost of imports due to yen weaknessthe impact of the Ukrainian war on the supply and cost of energy or labor costs.
The izakayas They are not the only places in Japan that have suffered the consequences of that explosive cocktail. Restaurants specializing in ramen are not exactly going through their best times either, with more than 70 businesses in bankruptcy in 2024, 30% more than the previous year. In their case, there is also an equally important handicap: the reluctance of many hoteliers to charge more than a thousand yen for their bowls of noodle soup, a psychological barrier from which, they believe, they could lose their clientele.
“A vestige of bygone eras”. At izakayas They are also affected by another factor, more intrinsic and linked to their business model. For years in its premises it was not unusual to find office colleagues drinking together when leaving work or on the way home, but that habit was cut during the pandemic and does not seem to have recovered. Or at least with the same vitality as before. Not to mention that Gen Z seems less interested for alcohol.
“He izakaya It is a vestige of earlier times, when the postwar generation of baby boomers dominated”, explains to Guardian Robbie Swiennerton, food critic for Japan Times. “Nowadays there are fewer young people and they don’t drink as much, nor do they want to drink in the same places as their parents and grandfather. The same goes for food.”
Why does this new trend seem to penalize small businesses especially? For a matter of priorities. Or at least that’s what the Watami chain considers it, which points out that clients only meet for one round, so they look for different places with a greater offer to meet.
Images | Yuya Tamai (Flickr) 1 and 2 and Moon Angel (Flickr)
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