Disappearing Long-Established Restaurants, Growing Chains - Is Germany's "Dining Out Shakeout" the Future for Japan?

Restaurants are disappearing from the city.

In Germany, recent years have seen a wave of closures of restaurants, cafes, and pubs. It was reported that in 2025, around 2,900 food-related businesses entered legal bankruptcy proceedings, an increase of about 30% from the previous year. This is the highest level since 2011.

However, just looking at the number of bankruptcies doesn't reveal the whole picture. There are cases where owners voluntarily close their businesses to avoid expanding deficits before their funds completely run out. Many closures don't appear as "bankruptcies" on the surface due to reasons like lack of successors, inability to update equipment, or inability to endure long working hours.

After the end of the COVID-19 pandemic, the number of customers returned to a certain extent. However, the management of restaurants did not return to its previous state.

The reason is simple. Even though customers returned, the frequency of their visits did not.

Families that used to dine out four times a month reduced it to two. People who used to visit restaurants weekly now only do so for birthdays or anniversaries. Office workers who used to eat lunch inside restaurants now buy from supermarkets or bakeries. Consumers haven't completely stopped dining out but have started to reduce the frequency.

Dining out is an essential expense in life, but it is easily replaceable with home-cooked meals, prepared foods, or frozen foods. In situations where it's not easy to cut costs like rent, electricity, or insurance, dining expenses are often targeted for household budget adjustments.

What is happening in the German food market is not a "loss of interest in eating." It's the disappearance of the consumption pattern of "just entering a store without much thought."

Raising prices is tough, and not raising them is also tough

The costs for restaurants are moving in the opposite direction of consumer savings.

Almost all burdens, including food ingredients, energy, labor costs, rent, transaction fees, and repair costs, have increased. Restaurants have never been an industry with high final profits relative to sales. Even a slight increase in costs can easily erase profits.

Raising prices leads to a decrease in the number of customers. Keeping prices the same makes profits thinner the more you sell.

Moreover, the impact of price increases does not manifest the same way for all restaurants.

Restaurants perceived as "places where you can't eat anywhere else" are more likely to have their price increases accepted. On the other hand, restaurants with many similar competitors nearby and no clear differences in food or service are often excluded from consideration even with a price increase of a few euros or a few hundred yen.

Until now, many restaurants have maintained their operations based on location, price, and relationships with regular customers. However, now, with map apps and review sites, it's easy to compare prices, ratings, photos, and even congestion levels.

While it has become convenient for consumers, for restaurants, it has become a market where "average scores won't get you chosen."

Restaurants with average food, ordinary service, and not particularly cheap prices, which once supported the daily life of the community, are now in the most challenging position.

It's not the food that's growing, but the "system" being sold

In Germany, system gastronomy, centered around chain stores, is growing.

The system-type restaurants referred to here are not just limited to burgers and fried chicken. They also include coffee shops, bakeries, pizza and pasta places, bowl specialty shops, doner kebab shops, and takeout-only stores.

What they have in common is not the genre of food but the systematization of operations.

They purchase ingredients in bulk. Simplify cooking processes. Manage the number of menu items. Take orders via apps. Use self-checkouts or mobile orders. Collect sales data from each store and quickly replace unsold items.

Such companies can invest in technologies and equipment that are difficult to implement with just one store.

According to 2025 data published by Germany's industry association, the number of visits to system-type restaurants exceeded 2019 by 13%. Meanwhile, visits to independent restaurants, mainly individually operated, remained 28% below 2019 levels.

System-type sales reached 36 billion euros, accounting for about 41% of the dining-out market. In terms of visits, it reached about 47%.

Notably, chains are not chosen simply because they are cheap.

Consumers also find value in knowing prices in advance, having easy ordering methods, being able to predict waiting times, and not having major disappointments in taste.

In other words, what system-type restaurants offer is not just food but the reassurance of "dining out with less risk of failure."

More serious dissatisfaction than "expensive" seen on social media

 

Looking at German-speaking social media and forums, dissatisfaction with dining out is not just about price.

Posts such as "Prices have gone up, but the quality of food has gone down," "Even if I pay a high price, the service is slow and unfriendly," and "I used to order pizza every week, but now it's only a few times a year" can be seen.

Some users explain that the reason for reducing the frequency of dining out is not simply a lack of ability to pay but rather "less satisfaction for the price paid."

On the other hand, there are also reactions defending the restaurant side.

Even if criticized for "raising prices too much" by only looking at food costs, in reality, rent, labor costs, utilities, and loan repayments are increasing. The cost of a restaurant is not just the ingredients on the plate.

The debate is not about one side being entirely correct, whether consumers or managers.

Consumers feel that "prices have gone up and value has decreased," while managers feel that "even if prices are raised, profits have not increased." The mutual distrust intensifies because both sides are struggling.

Furthermore, there are many voices calling for adaptation to cashless payments and digital orders. The more expensive the store, the greater the dissatisfaction if procedures like ordering, payment, and reservation are inconvenient.

Social media posts are not statistical public opinion surveys. However, it can be read that what current consumers are seeking is not just "cheapness."

Customers react more strongly to "not understanding the reason for the price increase from their experience" than to the price increase itself.

Japan is already at the same crossroads

What is happening in Germany is not a unique story of a distant country.

In Japan, restaurant bankruptcies in 2025 reached 900 cases, setting a new record. Small-scale bankruptcies with liabilities under 50 million yen accounted for about 80% of the total, with smaller regional stores in particularly tough situations.

By business type, taverns and beer halls had the most at 204 cases. Chinese and Oriental restaurants, including town Chinese, ramen, yakiniku, and curry, had 179 cases, and Japanese restaurants had 97 cases.

In the first half of 2026, restaurant bankruptcies reached 473 cases, the highest for a first half. Taverns and beer halls recorded 125 cases, and Chinese and Oriental restaurants recorded 91 cases.

The background includes high raw material costs, rising labor costs, utilities, rent, and changes in banquet demand. Especially izakayas have relied on the demand structure of large corporate banquets, after-parties, and drinking opportunities for young people.

In Japan, large chains can respond to rising costs through joint procurement, central kitchens, price revisions, and the use of store data. On the other hand, small stores have weak bargaining power for procurement prices, fear customer loss due to price increases, and cannot sufficiently pass on cost increases to prices.

According to a survey by Teikoku Databank, the price pass-through rate in the restaurant industry as of 2025 was 32.3%, below the average for all industries.

Even if a store raises prices by 100 yen, it does not necessarily recover all of the 100 yen cost increase. In many cases, the store bears the shortfall even after raising prices.

Even with rising sales, Japan's dining-out market is not secure

A survey targeting member companies of the Japan Food Service Association showed that dining-out sales in 2025 were 107.3% compared to the previous year. Customer numbers were 102.9%, and customer spending was 104.3%.

Fast food grew by 107.5%, family restaurants by 107.2%, and cafes by 109.8%.

Looking at the numbers alone, Japan's dining-out market seems to be doing well.

However, the increase in sales is significantly influenced by the rise in customer spending due to price revisions. In some areas, such as takeout rice, conveyor belt sushi, and yakiniku, the number of customers fell below the previous year. Even if sales are increasing, it does not necessarily mean that the number of visitors is increasing at the same pace.

Moreover, this survey is based on data from all stores, mainly of association members, and does not represent all small individual stores in the city.

The seemingly contradictory phenomenon of "large companies' sales are growing, but restaurant bankruptcies are also increasing" is not due to differences in aggregation targets but indicates the polarization of the industry itself.

Sales are concentrated in companies with capital strength, procurement power, recruitment power, and digital investment power, while smaller stores cannot absorb rising costs.

It's not that the entire market is shrinking, but rather that consumer spending is being consolidated.

"Acceptance of price increases" and "won't go anymore" intersect on Japanese social media

Reactions to restaurant price increases on Japanese social media are largely divided into two.

 

One is the reaction of "Price increases are natural as raw materials, labor costs, and utilities are rising," and "I want to pay a fair price to keep my favorite store."

If price increases are continuously rejected, stores have no choice but to lower the quality of ingredients, reduce staff, or shorten business hours. Ultimately, if they close, consumers also lose options.

The other is the reaction of "I won't go if it exceeds a certain price," and "Prices have only gone up, while quantity and service have decreased."

What matters to consumers is not the store's management situation but whether they were satisfied with the amount paid. Even if they understand the reasons for price increases, if their household budget is tight, they have no choice but to reduce the frequency of visits.

The debate over smartphone orders is also symbolic.

While some people appreciate it as an efficiency measure to compensate for labor shortages and suppress price increases, others find the requirement to register with apps or LINE burdensome. What is labor-saving for the store may be perceived as a transfer of work to the customer.

Digitalization does not unconditionally increase satisfaction. Users must also see benefits, such as easier ordering, reduced waiting times, and controlled prices.

It is questioned whether the lost service due to efficiency can be compensated with some other value.

It's not a simple story of "chains vs. individual stores"

Viewing this structural change as merely a story of chains driving out individual stores misses the essence.

Individual stores also have strengths.

Using local ingredients. Highlighting the owner's skills. Remembering customer preferences. Flexibly changing menus. Creating a unique atmosphere in a small space.

These are values that large chains cannot easily replicate.

The problem arises when the uniqueness is only in the owner's mind and not communicated to customers.

"Doing things the way they've always been done" is not the same as "customers finding value in that method." Inefficiencies like having too many menu items complicating preparation, maintaining a large space for unused seats, or spending time on cash transactions are separate issues from a commitment to taste.

Individual stores that survive will standardize the back-end while retaining their individuality.

They will digitalize reservation management, inventory management, accounting, procurement, and shift creation. Streamline menus and reduce waste. Focus business hours on high-demand times. Combine takeout and frozen products.

Be unique on the front end, rational on the back end.

Stores that can separate these two aspects will be competitive even if they are small.

Five conditions necessary for stores to survive

The first condition that will be important in the future dining-out market isbeing able to explain what kind of store it is in one sentence.

Being recognized as "this is the place for this dish" is stronger than having a wide variety of dishes. Specialization also leads to efficiency in procurement and cooking.

The second isthat the reason for the price is communicated.

Whether expensive ingredients are used, portions are large, or there is value in service or space. If the basis for the price is understood as an experience, it can move away from simple lowest-price competition.

The third isnot making customers wait.

If customers are kept waiting for a long time at any point, whether ordering, food delivery, or payment, they feel more cheated than by the price. Time performance is not just an issue for low-priced stores.

The fourth isnot relying solely on regular customers.

Long-term regular customers are important, but their visit frequency decreases due to changes in age or living environment. A system is needed where new customers keep coming in through search, reviews, social media, and reservation sites.

The fifth isnot trying to attract all customers.

Customers seeking cheap