Japanese kaintenzushi restaurant chains are focusing on geographical diversification to sustain growth and improve profitability. With demand falling in the domestic market due to rising prices and other adverse economic conditions, leading sushi chains aim to capitalize on the popularity of sushi in overseas markets, says GlobalData, a leading data and analytics company.

Suneera Joseph, Consumer Analyst at GlobalData, comments: “Leading Japanese kaintenzushi or conveyor-belt sushi chains, Sushiro and Kura Sushi, plan to boost their international presence to offset the slowdown in domestic business. 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’s intends to open 400 overseas outlets by 2030, with its first eatery planned in China in 2023.”

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 costs 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**.

Joseph concludes: “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 foodservice outlets after the lifting of COVID-19 restrictions.”

*GlobalData Q4 2022 Consumer Survey—Japan, with 252 respondents, published in November 2022

**GlobalData Q3 2022 Consumer Survey—Japan, with 232 respondents, published in August 2022