Foodservice players based in Japan lead the way in Asia — all five of the region’s biggest brands are headquartered in the island nation — with strong  convenience-store development and a sharp focus on domestic customers driving progress.

The c-store format dominates in Japan, and increasingly across the Asia-Pacific region. C-store operators hold the top three positions in terms of sales, with 7-Eleven and its parent company, retail conglomerate Seven & i Holdings Co. Ltd., ranked at No. 1. In Asia’s largest cities, often densely populated and gripped with renowned traffic, c-stores have carved out a strong niche as an alternative to traditional corner shops, boasting increased and significant foodservice sales.

While Japan boasts one of the best- developed chain restaurant markets in the world, with Japanese companies accounting for an impressive 16 of the world’s top 25 largest non-U.S./Canadian restaurant operations, most concepts still derive the majority of sales from their home market. International presence is limited to nonexistent, though this is changing, with a number of c-store operators making a strong push into markets like China and Thailand — alongside 7-Eleven’s decades-long international presence. But for now, chains in Japan continue to look inward and focus on Japanese consumers. This has remained the case despite an anemic growth environment for the nation, with overall foodservice spending in Japan contracting each year since 2003.

Data

• Chains by sales, growth
• Chains by worldwide units, growth
• Companies by sales, growth
• Chains by estimated sales per unit

Not surprisingly, survival in such conditions favors value-focused chains. Traditional Japanese cuisine offers a wide array of affordable, on-the-go eating options, and local restaurant chains have built entire concepts around many of these dishes. Two of the largest brands are Sukiya, a chain specializing in low-priced beef-and-rice bowls popular throughout Japan, and Hotto Motto, a takeout chain known for affordable prepackaged lunches. Also found among the world’s top 25 non-U.S./Canadian concepts is Akindo Sushiro, a low-priced chain specializing in self-service sushi served on conveyor belts, and Gyoza no Ohsho, a quick-service operator offering variations on gyoza, the traditional Japanese dumpling.

Outside of Japan, growth figures in Asia remain promising. Foodservice spending in India and China, for example, rose nearly 12 percent and 9 percent, respectively, in 2012. Clouds are on the horizon, however, as that 9-percent increase in China marked the first time in many years that foodservice spending didn’t hit double-digit growth. A spate of food-safety challenges this year coupled with a slowing economy suggests China may not see that rate of growth for the foreseeable future. Slowdowns are also underway in formerly high-flying markets like Vietnam.

In many markets, a restaurant company’s low-hanging fruit — selling a modern, upscale experience to a relatively affluent urban class — has long been picked, and operators must now turn their attention to both lower-income consumers and smaller urban areas. Looking ahead, this will likely create further opportunities for local restaurant brands while putting pressure on the global giants to adjust. The profusion of Japanese operators serving affordable local fare could provide a model for the entire region, particularly as attention turns towards the vast numbers of local consumers whose incomes remain limited, yet who also demand a modern foodservice experience.

Even among chains such as 7-Eleven, which has enjoyed remarkable growth across Asia, the need for a strong local partner will remain paramount, particularly as the need for localization grows more pressing.

By the numbers

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