Interface News Reporter | Lou Yibei
Interface News Editor | Xu Yue
Sushiro continues to accelerate its expansion in Chinese mainland.
On May 10, Sushiro opened a new store in Nankai Joy City, Tianjin, and announced that it would increase the number of Tianjin stores to three, and is also preparing to open a store in Beijing.
The conveyor belt belt sushi brand from Japan opened its first store in Guangzhou in 2021 in Guangzhou's Oriental Baotai Plaza, and after gaining a foothold in the South China market, it has successively entered cities such as Chengdu and Chongqing. The opening of the store in Tianjin also means that Sushiro will vigorously expand the blank northern market.
For now, Sushiro seems to have some consumer recognition in the northern market. On the day of the new store in Tianjin, many consumers on social platforms such as Xiaohongshu said that there were 177 tables in line at 11 a.m., and Sushiro also issued a notice at 5 p.m. on the same day, saying that the number would be suspended due to a full queue.
Over the past year, Sushiro has embarked on a rapid expansion mode.
Food & Life Companies, the parent company of Sushiro, said in its annual report ending September 2023 that the number of Sushiro stores in mainland China increased from nine to 34 during the reporting period, with new stores opened in five regions. Previously, Sushiro also announced in its medium-term business plan for 2024-2026 that it would expand the number of Chinese mainland stores to 201 by fiscal 2026.
But the report also said that the biggest challenge is the problem of nuclear wastewater, and the rate of decline in operating income in the Chinese mainland market is also high, especially in remote cities. The company remains cautious, but will continue to open new stores in Hong Kong, Guangzhou and Shenzhen, where revenue declines are relatively low. In terms of entering new regions, the company plans to expand its business to Beijing, Suzhou, Hangzhou and other places.
On May 10, Food & Life Companies released its semi-annual report for fiscal year 2024, which showed that in the first six months ended March 31, Sushiro's revenue in the mainland market increased by 74.9% year-on-year to 5.697 billion yen (about 260 million yuan), accounting for 13.7% of total overseas revenue, and EBITDA (earnings before interest, taxes, depreciation and amortization) was 241 million yen (about 11.18 million yuan). During the reporting period, the number of Sushiro stores in the mainland market reached 40.
It's not a very good performance.
As a comparison, Sushiro only opened 32 stores in Hong Kong, China during the reporting period, while the region's revenue increased by 42.5% year-on-year to 15.311 billion yen (about 710 million yuan), accounting for 36.8% of the total overseas revenue, and EBITDA increased by 25.7% year-on-year to 3.075 billion yen (about 140 million yuan).
Although the development of Japanese food in the mainland market has been hit by the nuclear wastewater incident, over the past few months, consumers have gradually established the perception that most of the ingredients used in Japanese restaurants are not from Japan, and the "mysterious veil" of Japanese food in the past has been debunked, and more affordable and popular Japanese food may have a certain competitiveness.
In the past few months, Sushiro has also stepped up promotional activities and conducted activities such as live streaming of the origin of ingredients. According to the semi-annual report, Sushiro continues to open new stores, and in order to maintain and increase the number of customers visiting the store, Sushiro continues to implement promotional and marketing measures such as luxury festivals in the mainland.
But Sushiro also faces more challenges.
After the market education of Fresh Rotary Sushi, Helu Rotary Sushi, Banzai Sushi, Genki Sushi and other conveyor sushi, Chinese consumers have more awareness of Japanese sushi, which also means that consumers are no longer as fresh as in the past, if the taste, quality and service cannot convince further repurchase, then the new brand is likely to be short-lived.
What's more, strong opponents from Japan are also coming in.
Zensho Holdings opened "Hama Sushi" in Tianjin, and also opened its first restaurant in Beijing in January this year; KURA SUSHI also opened its first store in Chinese mainland in Shanghai in 2023. Hiroyuki Okamoto, the company's director, has said, "We will open 100 stores in China within 10 years, and we will open stores at a very fast pace."
In addition, food safety issues will continue to test the supply chain management and operation capabilities of sushiro. In February, Japanese conveyor belt companies were stepping up their efforts to respond to a series of mischievous behaviors such as filming customers smearing saliva on sushi on conveyor belts after a series of videos appeared on social media.