New State of Emergency Deepens Restaurants’ Wounds

The Yomiuri Shimbun

13:54 JST, January 12, 2021

Many restaurants and other establishments began operating for shorter hours, ending the service of alcohol by 7 p.m. and closing at 8 p.m., to comply with administrative authorities’ requests on Friday as Tokyo and three surrounding prefectures were placed under a second state of emergency.

Restaurants and other establishments are being hit harder this time, compared to last spring when a state of emergency was declared in response to the first wave of the spread of novel coronavirus infections.

Even after the first declaration was lifted, many people have continued exercising self-restraint on going out, and eateries are required to take preventive measures such as reducing the number of seats available for customers, making it difficult for them to bring their customers back as before.

The latest declaration has put a damper on the situation surrounding them, inviting even more backlash among business operators toward the central and local governments.

“We’re taking last orders for food and drinks in 10 minutes,” the owner of yakitori restaurant Rikiya in Kinshicho, Tokyo, said as two customers entered the eatery at about 6:50 p.m. on Friday.

Following the declaration, he has to close the restaurant at 8 p.m. to receive ¥60,000 each day for cooperation in complying with the requests.

The customers said they understood, and the last dish was served to them only 10 minutes before closing. Sales on Friday and Saturday were down by 80% compared to the previous year.

“Closing the restaurant at 8 p.m. is really tough. We may have to think about temporarily shutting down as an option,” said the owner.

If the restaurant receives the ¥60,000 cooperation money each day from Friday through Feb. 7 — the planned duration of the state of emergency for Tokyo — the total would come to ¥1.86 million. Even with this amount, he said it would still be difficult to run the business.

Kozo Hasegawa, president of Global-Dining, Inc. in Minato Ward, Tokyo, openly criticized how the government is handling the situation.

“We find it difficult to continue running our business and maintain employment only with the cooperation money and the other administrative support currently available. We can’t comply with the request to cut operating hours,” he said.

The company, which operates washoku restaurant Gonpachi among other eateries, has most of its establishments open for usual business hours even during the state of emergency.

The impact on the major restaurant chains is severe as they have been ineligible, so far, for the cooperation money provided by some local governments.

“It’s a tough request, but we want to comply with it. However, if this situation continues, the restaurant industry in Japan will collapse,” Miki Watanabe, chairman of Watami Co., said, showing a sense of urgency.

The company has decided to temporarily close about 80 of its about 100 izakaya restaurants in Tokyo and the three prefectures. The restaurants that remain in operation now close at 8 p.m.

Since last year, Watami has been closing unprofitable restaurants and converting some locations to fried chicken eateries.

It has decided to close 80% of its izakaya restaurants in the Tokyo metropolitan area because even if it kept them open, it would not be profitable if they could not serve alcohol after 7 p.m.

According to a tally by an industry group, companies that operate nationwide izakaya chains suffered a devastating blow as their sales in April last year were down by 91% compared to the same month a year earlier. Sales in November last year, the latest month available in the tally, were down by 43%.

Department stores also continue to suffer. The number of customers halved at one department store in Tokyo compared to the previous year for the first eight to 10 days after the state of emergency was declared. Usually, the first half of January is relatively busy with winter seasonal sales on the heels of New Year sales, but the nonfood sections saw a drop in customer traffic.

Department stores were asked for cooperation, but this was not based on the special measures law to cope with new strains of influenza. Department store operators successively decided to shorten their opening hours to close at 8 p.m. Many of them closed their stores, except for the food sections, when the country was under the first state of emergency last year, but this time they decided to keep their stores open by implementing thorough preventive measures against the virus.

Gross domestic product (GDP) for the 2020 April-June period fell sharply, with the real growth rate dropping by an annualized 29.2% compared with the previous quarter.

Toshihiro Nagahama of Dai-ichi Life Research Institute Inc. said the current emergency declaration would push GDP down by ¥1.6 trillion, equivalent to 0.3%.