For first time in its history, Sushiro plans more openings abroad than in Japan

For the first time in its history, Food and Life Companies – which operates Sushiro, the top conveyor-belt sushi chain in Japan – is planning to open more restaurants overseas than in its home country.

Food and Life Companies plans to open 50 to 60 Sushiro shops overseas during the fiscal year ending in September 2023, while opening 18 to 22 in Japan over the same period. Sushiro’s overseas expansion has seen steady progress, from 12 shops in South Korea and Taiwan in 2018 to 88 overseas shops by the end of September 2022, and the company expected to reach 100 by the end of calendar 2022.

According to the company’s financial results briefing materials for FY 2022, Sushiro’s domestic sales rose just 2.3 percent, from JPY 213 billion to JPY 218 billion (around USD 1.6 billion, EUR 1.5 billion), while sales at the chain’s overseas shops jumped 125.5 percent, from JPY 17 billion (USD 130 million, EUR 120 million) to JPY 38.3 billion (USD 294 million, EUR 270 million).

New store openings and the relaxation of Covid-19 lockdowns account for the big sales increases outside of Japan. Sushiro opened 29 new stores abroad in 2022, bringing its total number of restaurants overseas to 88, while it added 34 new stores in Japan, reaching 644 outlets total.

Sushiro's operating income (before royalty expenses) of its shops in Japan, where price competition is fierce, dropped 47.1 percent in 2022, to JPY 13.6 billion (USD 104 million, EUR 96 million), while that for the overseas shops went from a loss of JPY 697 million (USD 5.3 million, EUR 4.9 million) to a gain of JPY 3.4 billion (USD 25.7 million, EUR 23.6 million). 

In 2022, Hong Kong and Taiwan were the company’s most-important foreign markets, making up 36.5 percent and 34.2 percent of its overseas sales, respectively. Thailand represented 9.5 percent of the chain's sales, while Singapore accounted for 8.5 percent, China made up 5.9 percent, and South Korea represented 5.4 percent. Its overseas earnings were led by Hong Kong, at 24.2 percent; followed by Thailand at 15.4 percent; Taiwan and Singapore, both at 13.9 percent; South Korea at 7.8 percent; and China, which accounted for a 4.9 percent loss.

Sushiro's performance in its various markets was directly tied to the Covid-19 measures of each country, with sales in South Korea, Hong Kong, and Thailand minimally affected by relatively lax Covid-19 policies, but tighter virus-control measures in Taiwan, Singapore, and China resulting in lower sales.

In South Korea, Sushiro's sales recovered steadily to reach a record-high and a full-year operating profit in 2022. However, staffing shortages related to the pandemic. The company intended to open a new shop but decided to reverse course, and its total number of shops remained steady at nine.

In Hong Kong, Sushiro restored full operating hours after the city lifted its regulations its Covid-19 restrictions. The company opened six new restaurants in Hong Kong in 2022, raising its total to 17, one shy of its target number for the year. At the same time, cost-cutting measures imposed by Sushiro in Hong Kong helped its units there achieve profitability.

In Thailand, aggressive sales promotions resulted in strong sales, while labor-saving measures resulted in lower expenses, the company said.

In Taiwan, Sushiro's average monthly sales at its existing stores increased year-on-year due to frequent sales promotions and marketing efforts. Both its customer count and average spend per customer increased. The company added four stores in Taiwan in 2022 to bring its total to 30, two short of its 2022 target.

In Singapore, existing store sales increased after Covid restrictions were lifted in April. In order to solve a shortage of personnel, the company is introducing labor-saving equipment. Sushiro opened two new stores in Singapore in 2022, reaching 11 in total, four short of its target of 15. 

And in Japan, in addition to the belt conveyors it is known for, Sushiro has added touchpad ordering systems at most tables and has recently introduced automated table assignment systems and cashless payment systems. 

In China, Sushiro's operations were affected by Covid-19 regulations in Guangzhou and other places. Now that China has ended its zero-Covid policy, the company plans to promote sales in 2023 by holding a reopening festival. The chain is preparing to open its first store in Chengdu, and will also open more stores in Shenzhen, while focusing on recruiting and training.

Its medium-term management plan covering 2022 to 2024 calls for increasing the number of overseas stores to within the range of 55 to 61 in Taiwan, 42 to 46 in China, 32 to 35 in Hong Kong, 22 to 24 in Thailand, 21 to 23 in Singapore, and 21 to 23 in South Korea.

“[Food and Life Companies] is accelerating its overseas store openings to achieve the medium-term management plan announced in November 2021,” the company said, following the 15 September opening of the first Sushiro in Shenzhen, China. “Starting with the opening of this store, we plan to open a second store in Shenzhen by the end of the year, and aim to open more than 40 stores in mainland China by the end of fiscal 2024, the final year of our medium-term management plan.”  

Photo courtesy of Takashi Images