Japan’s izakaya restaurants, wedding halls that feel like a pinch



© Reuters. FILE PHOTO: Izakaya, a Japanese-style food bar, closes at 8:00 p.m. local time during the coronavirus disease (COVID-19) outbreak in Tokyo


By Leika Kihara

TOKYO (Reuters) – The number of bankrupt Japanese “izakaya” restaurants hit a record high in March. This is a sign that some service companies are lagging behind despite 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. Business confidence improved to pre-pandemic levels in the first quarter.

However, hardest hit industries like restaurants are likely to remain under pressure as Japan plans to move Tokyo to a new, month-long “quasi-emergency” state to tackle rising COVID-19 cases.

In fiscal 2020, a total of 175 izakaya bars – a mainstay of Japanese work culture and nighttime drinking – went under, a year-on-year increase of 17% and the highest level since data became available two decades ago, think tank Tokyo Shoko Research said on Friday.

“People stayed away from the bars to avoid the crowds. Small restaurants also suffer from the cost of investing in equipment to prevent the virus from spreading like partitions,” Tokyo Shoko Research said.

Wedding hall operators were also affected as people did not hold large banquets. Nine of them went down in fiscal 2020, putting on weight for the second year in a row, Tokyo Shoko Research said.

A separate government survey found that sentiment in the services sector improved in March, while an index measuring prospects worsened on concerns about a resurgence of the infections.

“Japan’s economy as a whole is recovering from the pandemic. However, industries that provide personal services are falling completely behind,” said Taro Saito, an economist at the NLI Research Institute.

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Steven Gregory