Japanese restaurants take off in provinces

Japanese restaurants take off in provinces

Mr Taketani says there is still room to grow in Thailand, particularly in the provinces, because of better supply of raw materials. (Photo by Pitsinee Jitpleecheep)
Mr Taketani says there is still room to grow in Thailand, particularly in the provinces, because of better supply of raw materials. (Photo by Pitsinee Jitpleecheep)

Japanese restaurant operators in Thailand have continued to expand despite the pandemic, according to the latest market survey by the Japan External Trade Organisation (Jetro).

The number of Japanese restaurants rose by 12.6% from a year before to 4,094 restaurants this year.

Thailand hosts the largest Japanese restaurant business in Asean. Of the total 4,094 restaurants, 2,105 restaurants are in Bangkok and 1,989 are in provincial areas.

Atsushi Taketani, president of Jetro Bangkok, said the growth of Japanese restaurants in provincial areas has been quite healthy this year, up 21% from last year, far outstripping 5.6% growth in Bangkok.

The better growth in provincial areas is attributed mainly to the opening of more retail complexes in the provinces by retailers and an active franchise expansion by Japanese operators into provinces.

"Japanese restaurants in Thailand have made gains since 2000, with continuous growth every year," Mr Taketani said.

"There is still room to grow here, particularly in the provinces because of better supply of raw materials," Mr Taketani said.

He said the number of Japanese restaurants in Thailand's upcountry areas tends to increase further.

The proportion of Japanese restaurants in provincial areas has risen to 48.6% of the total this year, up from 37.3% in 2017.

"There are Japanese restaurants in every province of Thailand. Chon Buri is the second-largest Japanese restaurant market after Bangkok, followed by Nonthaburi province with 86 new Japanese restaurants opened this year," Mr Taketani said, adding the pandemic has delivered a heavy blow to the Japanese restaurant business overall because of a lack of foreign tourists and Japanese businessmen entering Thailand.

Jetro expects more new Japanese restaurants to open in provincial areas next year.

He said sales at Japanese restaurants experienced improved recovery in the third quarter, with sales rising by 30-85% for the period, particularly those targeting Thais. Their sales ranged from below 30% to zero for certain restaurants during April.

Japanese restaurants that target foreign tourists and Japanese customers continue to see a relatively slow pace of recovery, said Mr Taketani.

However, a market survey has found the number of new Japanese restaurants opened in Thailand in 2020 declined by 726 restaurants from last year, the highest record in the past 13 years because of the pandemic and fierce competition in Thailand's 385 billion-baht food industry.

The drop was seen across all Japanese food categories. The top five restaurants that reported a huge drop were general Japanese restaurants, sushi, suki/shabu, ramen and izakaya, attributed to the temporary and permanent closure of restaurants because of the pandemic, while some restaurants have changed their menus and restaurant design.

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