Izakaya are a unique part of Japanese food culture. Their closest analogy would be pubs, since izakaya serve a wide variety of alcoholic drinks and food meant to be paired with such beverages. Their menus are much more extensive than just basic bar munchies, though, with things such as yakitori chicken skewers, grilled onigiri rice balls, and plates of sliced sashimi being long-standing favorites. As a matter of fact, unlike with a pub, the expectation is that izakaya customers will always order some kind of food too, though there’s still a greater focus on drinks than at a regular restaurant.
However, izakaya are in a tough spot in Japan these days, and since the start of the year have been going bankrupt at a faster rate than at any time in nearly the past 40 years, according to a new study.
Data from Tokyo Shoko Research, a commerce and industry research organization, shows that between January and April of 2026, 88 izakaya have declared bankruptcy with debts of 10 million yen or more. That’s 54.3 percent more than for the same period last year, and the highest number Tokyo Shoko Research has observed for the first quarter of the year since it began tracking such statistics in 1989, significantly more than the previous high of 59 in 2024.
So what’s causing the closures? A mix of factors, but one of the biggest is rising prices. Japan is experiencing by far its worst inflation in a generation, and costs for not just ingredients, but also for utilities, are hitting izakaya hard. Many are responding by reducing portion sizes, reworking recipes to make use of cheaper ingredients, or raising the prices they charge their own customers to make up the increased expenses. There are limits to how much of those tactics diners will put up with, though.
Facing rising costs for their own necessities such as rent, groceries, transportation, and home utilities, many consumers are becoming much more sensitive to the value they’re getting with the reduced amount of money they have left over for discretionary spending, and izakaya are looking a lot less appealing to many people than they used to. In particular, Tokyo Shoko Research points out that izakaya offers that include a full meal’s worth of food plus unlimited drinks for a period of time (usually 90 or 120 minutes), traditionally some of their most attractive deals, have gotten more expensive and now often cost more than 5,000 yen, a price point that many diners are balking at.
The study also highlights recent changes in dining/drinking patterns in Japan. Traditionally, izakaya have gotten much of their business from groups of coworkers coming in together, either as part of a pre-planned event such as a welcome party for new employees or an end-of-the-year celebration, or as spontaneous excursions to grab a drink after clocking out, sometimes after doing overtime and being too hungry/thirsty to wait until they can commute back home. However, those gatherings largely went away during the pandemic, and while many izakaya weathered that economic storm due to financial support from the government, the custom of coworkers going to drink together hasn’t rebounded to its previous level.
Part of that is due to more people working from home, something that was extremely rare in Japan prior to the pandemic. Many jobs now offer at least some telecommuting flexibility, meaning fewer people in the office, and so fewer people to go grab a cold Asahi with on the way to the station at the end of the day. There’s also been a gradual increase in desire for a more even work/life balance in Japanese society. Even many in management positions are now more aware that constant overtime chips away at morale and the company’s ability to retain workers, and have come to accept that many employees feel that, when overtime does have to be done, having to go drinking with your boss afterward doesn’t make up for it, but actually makes the situation even worse.
So when you combine higher prices, freedom from the obligation to go to izakaya with coworkers, and the possibility of already being at home when you clock out from work, having a drink in the comfort of your living room, and one you purchased at the supermarket for half of what an izakaya would have charged you, becomes a very compelling alternative.
Ah, but what about inbound foreign tourists? Japanese cuisine is one of the top reasons travelers from overseas come to Japan, and with the yen remaining so weak, many visitors still feel like dining out here is a bargain compared to their home countries. Tokyo Shoko Research, though, says that izakaya aren’t drawing in foreign tourists to the same extent that other restaurants in Japan are.
The report doesn’t offer any theories as to why this is, but it likely has something to do with international foodies’ passion for Japanese food being strongly focused on specific dishes, such as ramen, sushi, or curry rice. While many izakaya do have tasty food, their broader menu makes them a little less likely to hook a traveler’s attention than, for instance, a restaurant whose storefront is plastered with signage featuring photo after photo of steaming hot bowls of ramen. Ordering at izakaya is also a little trickier to navigate. There aren’t any vending machines at the entrance to purchase a meal ticket from, and it can be hard for newbies to estimate how many plates of food to order for a filling spread. There’s also the whole otoshi custom of unasked-for appetizers that you still have to pay for, but aren’t told the price of in advance, which can be an unpleasant bit of culinary culture shock.
Izakaya, like all pubs, are about more than just base sustenance. In a sense, they’re a form of entertainment, and much like certain genres of music or movies fluctuate in popularity, there’s a chance that izakaya will bounce back. For now, though, the situation isn’t very rosy, so if you see one that looks intriguing, they’d probably really appreciate it if you came in for a drink and a bite to eat.
Source: https://japantoday.com/category/business/japan%E2%80%99s-izakaya-pubs-closing-at-record-pace-failing-to-attract-foreign-tourists
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