Japan Coronavirus Bankruptcies Hit 1,000; Restaurants Have No Way Out

Tokyo, Feb. 2 (Jiji Press)--The restaurant industry is a leading victim of the coronavirus pandemic in Japan, data released Tuesday by a private credit research firm showed. The cumulative number of business failures caused by the spread of the novel coronavirus reached 1,000, with the restaurant sector seeing 182 cases, the largest industry-by-industry figure, Tokyo Shoko Research Ltd. reported. According to the research firm, an inn in Aichi Prefecture suspended operations in February last year, becoming the first to go bankrupt in the country due to the pandemic. After marking 104 failures in June, the monthly bankruptcy figure dropped in July and August. Since September, however, the figure has stayed high around 100. The slump in the restaurant industry also resulted in bankruptcies of 46 food and beverage wholesalers and 31 food makers. Other industries offering face-to-face services were hit hard as well, with the hotel sector seeing 62 business failures. Meanwhile, labor ministry data showed that the number of people who were fired or had their contracts not renewed in the restaurant industry exceeds 10,000, second only to the manufacturing industry. The government has been trying to keep businesses afloat and maintain employment through special measures such as effectively no-interest, collateral-free loans and employment adjustment subsidies. "But there may be an increase in failures among mainly small businesses who run out of strength to remain viable with no signs of business improvements in sight," a Tokyo Shoko Research official said. Many businesses are complaining that the central and local governments have failed to implement coronavirus countermeasures in an appropriate and timely manner. "The subsidies (given to those who comply with requests for shortened hours) do not reflect the scale of the business, so we are in the red," said an official at a major restaurant chain, criticizing the same-amount relief for all businesses. "The 'Go To Travel' scheme is suspended nationwide at the moment, but the government should resume it in prefectures seeing the virus stop spreading," a senior official of a hotel industry group said. The uncertainty of when the pandemic will end is casting a cloud over all industries. "We don't know how long travel demand will remain sluggish," an airline official said. "Even if coronavirus cases decrease for the time being, we don't know what will happen in the future," a major department store's official noted. "With our loans ballooning, leading banks, in particular, are increasingly taking a stringent lending stance," a restaurant industry source said. "The situation is different from the state of emergency that was in place last spring." END