JAPAN’S top conveyor-belt sushi chain, Sushiro, is leaning on profits from its rapid overseas expansion to take the bite out of surging rice costs at home.
Long a staple of budget-minded Japanese consumers, sushi as a fast food has grown increasingly popular outside of the country in recent years, especially in other Asian nations. Sushiro has been among the biggest beneficiaries of that trend, boosting the Osaka-based chain’s presence well beyond its home market.
The company, which also runs other sushi and izakaya pub chains, is betting on continued overseas growth to provide a cushion against volatile rice prices at home, which have nearly doubled from a year ago. Sushiro operator Food & Life Co Ltd aims to grow the number of restaurants outside Japan to 320 by 2026, up from 182 last year. Most of the new stores will be in Asia, with a first US Sushiro outlet also planned.
Runaway rice inflation has been squeezing Japanese households and pushing companies to consider passing more costs onto customers. Food & Life’s broader approach is to absorb cost pressure through the growth of international business as the profit ratio rises.
That strategy already is paying off. Overseas operations generated almost half of operating profit in the nine months ended June, despite contributing just 30% of revenue.
Food & Life raised its full-year profit forecast in August after reporting a 68% jump in operating profit during the nine-month period. That has allowed the company to refrain from across-the-board price hikes at its Japanese restaurants to offset the higher rice costs.
Foreign markets are expected to account for 35% of revenue by fiscal year 2026, and tourism is adding further momentum, as visitors try affordable sushi in Japan and seed demand back home.
Investors have pushed up Food & Life shares by 155% this year, making the company the best-performing consumer stock so far in 2025 on Tokyo’s benchmark Topix index.
At home, Sushiro is also trying to keep restaurant traffic steady despite rising inflation and cost-of-living pressures that are hitting household budgets. The chain nudges customers toward higher-margin items such as fried foods and desserts, while selectively raising prices on certain dishes instead of the blanket menu-wide hikes used by rivals.
Food prices at grocery stores in Japan are outpacing the rise in costs of eating out, making meals at Sushiro appear more cost-effective to consumers, Mizuho Securities Co analyst Hideya Asaeda said. The chain also enjoyed high margins in China, he said. — Bloomberg
Kanoko Matsuyama and Yui Hasebe write for Bloomberg. The views expressed here are the writers’ own.
