Full-Service Restaurants in Japan

PROSPECTS

Trend towards eating at home poses considerable challenge

Rising labour and ingredients costs and unfavourable demographic trends have presented considerable challenges to full-service restaurants, significantly constraining growth at the end of the review period. Full-service restaurants has been hit particularly hard by the consumer trend towards eating at home, which is being bolstered by the growing range of nakashoku (packaged ready meals) options provided by outlets such as convenience stores.

Full-service restaurants developing home delivery

In response to the ongoing trend towards eating at home, full-service restaurant operators are working to develop their delivery services. As the major delivery platforms, such as Uber Eats and Demaekan, are limited in certain areas, some full-time restaurant players are investing in their own delivering networks.

Increasing focus on digital solutions

In their efforts to improve operational efficiency and address the issue of the labour shortage, an increasing number of full-service restaurant operators are exploring digital solutions. As well as lowering operational costs, these players expect this investment to improve the customer experience and open new channels for selling their meals.

COMPETITIVE LANDSCAPE

Skylark working to adapt to evolving market conditions

Leading player, Skylark, began to roll out low-priced menus towards the end of the review period, while seeking to reduce costs by cutting back on night opening. The company also began to shift its focus towards smaller specialised chains, introducing the La Ohana Hawaiian Dining & Café and Karayoshi Japanese fried chicken brands.

Ikinari! Steak benefits from low-carb trend

Ikinari! Steak saw continued strong growth on the back of aggressive outlet opening at the end of the review period. The brand, which is known as one of the first chained restaurants serving mainly red meat steak, also benefited from the growing popularity of low-carb, high-protein diets.

Ikinari! Steak becoming a victim of its own success

While Ikinari! Steak continued to see strong growth in 2019, its success has led to intensified competition, persuading many other brands to introduce similar concepts, with even restaurants that do not specialise in steak starting to provide red meat steak. As red meat steak has become increasingly popular amongst Japanese consumers, Ikinari! Steak has, therefore, started to lose its distinct advantage.

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