TOKYO -- Amid concerns over the prolonged coronavirus crisis and the potential of further economic damage from the state of emergency declared in the capital region on Jan. 7, some restaurants and service industry businesses have criticized the government's request for them to shorten their business hours and say they do not intend to comply.
The state of emergency declaration issued by Prime Minister Yoshihide Suga focuses on asking eateries to curtail their business hours, and puts pressure on the retail and dining industries to respond.
Businesses like restaurants, in particular, won't be able to avoid financial damage from the request, and some have expressed their unhappiness and dissent. With an exacerbated slump in consumption and employment at risk depending on the state of infections, it is possible that the country's economic recovery will be delayed, too.
Among those complying with the request for shortened hours is Watami Co., which manages eateries including the Japanese-style pub chain Watami. From Jan. 8 the company has decided to temporarily shorten business hours at its approximately 140 establishments in the four capital region prefectures subject to the state of emergency.
Starting Jan. 8, Isetan Mitsukoshi Holdings Ltd. is making closing time 7 p.m. at six of its department stores. A company official commented, "We've done this so that customers and staff can get back home by 8 p.m., after which people are being asked to stay home."
But some eateries have expressed their dissatisfaction. Gyudon beef bowl chains Yoshinoya Co. and Sukiya Co., among others have responded to local government requests by withdrawing alcohol from sale, while continuing their late-night business hours. An individual connected to one of the chains said, "Most of our customers come alone, so there's very little conversation. As with other eateries, it's tough for us to be asked to shorten our business hours."
During a company assembly on Jan. 6, Kirin Brewery Co. President Takayuki Fuse expressed concern, saying, "Demand over the New Year period evaporated. If we have a state of emergency declaration on top of this, jobs are going to be lost. I have reservations about a one-size-fits-all response."
There are also companies that aren't cooperating at all with the request for shorter business hours. A Jan. 5 Facebook post by Kozo Hasegawa, president of Global-Dining which manages around 40 restaurants including the Gonpachi izakaya chain, wrote: "The government's financial aid and support isn't commensurate with its requests to shorten business hours."
In light of government support plans and other measures, the company was apparently set to decide on its policy by Jan. 8. A restaurant and bar manager in his 40s in the capital's Minato Ward told the Mainichi Shimbun he intends to reject the request for shortened hours, saying, "We've been taking (infection) prevention measures and we're staying open."
Behind the resistance to the government's calls are the straitened economic conditions many businesses have been forced into during the protracted coronavirus crisis. Figures published by Tokyo Shoko Research, a market data company, showed that in 2020, bankruptcies involving dining business that owed 10 million yen (about $96,300) or more were up 5.3% on the previous year, with 842 instances. The figure is a record high for a single year.
Skepticism in the industry about the efficacy of reducing business hours to prevent infections is also deeply rooted. TableCheck, a Tokyo-based firm managing restaurant booking systems, investigated data on some 2,000 Tokyo eateries that closed early during the summer of 2020 following the metropolitan government's requests, and found that restaurants became more crowded in the evenings compared to before the requests. The company concluded, "Shortened hours are having the reverse effect. Reservation and time controls are the effective way forward."
But what will happen to Japan's economy in this repeated state of emergency declaration? UBS Securities Japan Co. estimates that if the situation goes on for 45 days, individual spending between January and March 2021 will fall by some 1.8 trillion yen (about $17.3 billion). The current emergency declaration is limited compared to the previous one in the spring of 2020, so the company says it expects the adverse effects to stand at about 30% of what was seen back then.
The company's Chief Economist Masamichi Adachi predicted, "The recovery of economies overseas also plays a part, so from this spring onward, the scenario for the Japanese economy to enter a path to recovery remains unchanged."
Conversely, Dai-ichi Life Research Institute Inc.'s Chief Economist Hideo Kumano struck a cautious tone, saying, "It can't be discounted that this (declaration of a state of emergency) will have a more painful effect on certain businesses than the one in the spring of 2020 did."
He added, "Particularly from the point of view of service industries like restaurants, for whom recovery has been slow, the issuing of another declaration is a painful blow. The risks from a dip in individual spending have not disappeared."
(Japanese original by Hajime Nakatsugawa, Daichi Matsuoka, Mihoko Kato and Kiyohiro Akama, Business News Department)