Jul 08, 2021 02:39 PM

Japan Eatery Chain Watami Returns to China for Taste of Recovery

Japan’s Watami is set to open a fried chicken restaurant in Shanghai this month. Photo:
Japan’s Watami is set to open a fried chicken restaurant in Shanghai this month. Photo:

(Nikkei Asia) — Watami, one of Japan’s biggest restaurant operators, debuts a fried chicken shop in Shanghai this month as the company hunts foreign growth while the industry remains under coronavirus restrictions at home.

The move reverses the company’s exit from China last year when Watami, known for its namesake izakaya gastropubs, shut seven locations under this brand in the country as the pandemic upended the restaurant industry there.

Watami has teamed with TANSH Global Food Group, the operator of Shanghai Min restau-rants, signing a franchise agreement with the local partner for the Japanese company’s Karaage no Tensai fried chicken chain. TANSH will set up the first location in Shanghai and more sites in other parts of China, also soliciting franchisees.

The partners also will consider bringing Watami's yakiniku grilled beef restaurants to Chi-na, as well as forming a joint venture.

Japan's restaurant market thinned 15.1% in 2020, according to the Japan Food Service Association. The country’s slow rollout of coronavirus vaccines has let infections continue to rise, and restaurants in greater Tokyo remain restricted in store hours and serving alcohol.

But some overseas markets are roaring back. China’s restaurant market sank 17% in 2020 but surged 70% on the year in the first two months of 2021, Nomura Research Institute said. Covid-19 restrictions are being lifted in many parts of the U.S. and Europe, and people are returning to restaurants.

Consequently, others in Japan’s restaurant industry eye growth overseas as well.

Zensho Holdings plans to open a record 388 locations outside of Japan this fiscal year, in-cluding stores under its mainstay beef bowl Sukiya chain in China and more takeout sushi shops in the U.S. The company intends just 116 openings in Japan.

Zensho’s overseas openings had declined to 294 last fiscal year, following 344 in the year ended March 2020.

A Nikkei survey in late May found that leading restaurant operators are in expansion mode. The top 100 publicly traded eatery companies in Japan look to open at least 730 locations overseas in fiscal 2021, a jump of more than 20% on the year.

This story was first published in Nikkei Asia.

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