Japan’s Major Household Name Exits Mainland China as Value Brands Surge—Some Stores Now See 3,000 Queue Numbers a Day

“My life will still have plenty of money and plenty of love—but it will never again have a New Year’s Eve spent with friends waiting behind 3,000 tables for dinner…”

In 2025, Sushiro undeniably became one of the year’s most talked-about restaurant brands. On December 31, a Beijing netizen posted that they queued with friends at Sushiro’s Xidan Joy City store on the final day of 2025—pulling a number in the 3,000s. They arrived around 5:30 p.m. and didn’t sit down to eat until 11:00 p.m.

And this wasn’t a one-off “holiday spike.” Sushiro has been drawing lines all year—whether it was the 3,000-table New Year rush or the “long-queue by default” scene whenever a new flagship store opened in a city. As early as August 21, 2024, Sushiro’s “first Beijing store” at Xidan Joy City reportedly hit 1,500 queue numbers, with estimated waits once exceeding 10 hours after midday.

“Sushiro is the hottest restaurant brand of the past two years. It’s growing fast because its pricing is highly attractive,” said Zhu Ruishi, Consulting Director at Shengliniao Consulting, in an interview with a 21st Century Business Herald reporter. If Sushiro’s popularity could be summed up in one phrase, he added, it would be: exceptional value-for-money.

Other value-oriented sushi chains such as Hama Sushi and Jinjian Sushi are also expanding aggressively. In sharp contrast, well-known Japanese brand KURA Sushi has been closing stores and exiting mainland China. According to Southern Metropolis Daily, KURA once publicly stated it aimed to open 100 mainland stores within 10 years, yet since launching its first mainland outlet in June 2023, it opened only three stores—all in Shanghai.

The dramatic split raises an unavoidable question: why is the budget conveyor-belt sushi segment seeing such different outcomes in China—and what is really determining who wins?

In June 2025, KURA Sushi announced via its subsidiary Asia Kura Sushi Co., Ltd. that it would gradually shut down all Shanghai stores—effectively signaling its exit from the mainland market. (Image: announcement screenshot)

The “Budget Sushi” Queue Phenomenon

On December 6, 2025, Sushiro opened two debut stores in Shanghai on the same day. Doors opened at 10:00 a.m., and by 12:00 noon all queue numbers had already been issued. Some diners reported taking a number at 10:00 a.m., only to find themselves in the 500s—and not getting their 10-yuan sushi until around 4:00 p.m.

Earlier in the year, Sushiro’s Hangzhou store, which opened in April 2025, was reportedly booked out through June on opening day. The brand even set up dedicated guidance signage at a nearby subway exit. In interviews, multiple consumers told 21st Century Business Herald that the “extreme queueing” came from a blend of novelty, social excitement, strong pricing, and herd mentality.

“One can’t deny the food is decent and the prices are attractive—but it’s not so amazing that it justifies a 3–5 hour wait,” said one customer who queued for two hours. “There’s definitely a bit of following the crowd. The interactive elements, the conveyor-belt ordering, and the way dishes are served feel different from other restaurants—so it’s also about the experience.”

Public information shows that one of Sushiro’s signature items—foie gras sushi—can be priced as low as 8 yuan, alongside “traffic-driving hits” like corn gunkan at 5 yuan. The momentum also appears in earnings. According to the latest half-year report released in May 2025 by its parent company FOOD & LIFE Companies, net sales in overseas markets including mainland China reached 58.807 billion yen, up 41.5% year-on-year, while profit rose to 6.371 billion yen, up 98.7%.

Sushiro also plans to increase its store count in Greater China to 157–161 in fiscal 2025, and further to 190–193 in fiscal 2026.

Sushiro isn’t the only one thriving. Hama Sushi has also gained strong traction in China. “It suddenly feels like Hama Sushi is popping up in multiple shopping districts—sometimes you see it even on the construction hoardings for new sites,” said Xiaolin, a Shanghai-based consumer and loyal fan of the brand. “Before, I had to take a 30-minute subway ride to eat it and never had to queue. Now three stores have appeared near my home—and even on weekday evenings there’s a line.”

Media reports noted that by the end of the third quarter as of December 31, 2024, Hama Sushi’s mainland store count had grown from 62 to 87 compared with the same period the previous year.

Behind the rapid expansion, value-for-money is the key driver. On Dianping, Sushiro’s average spend per person is generally under 100 yuan. Many consumers also share additional promotions online, including homemade “discount set menus” that stretch the budget even further.

Industry observers point out that amid broader economic pressures, consumer willingness to spend—along with actual spending power and confidence—has become more rational. The “AlixPartners 2026 Global Consumer Outlook” report noted that many diners are reassessing whether eating out delivers real value: 31% of global consumers believe restaurant dining does not provide value commensurate with its cost, and net willingness to spend on dining out has declined by about 21 percentage points.

KURA Sushi: Closures and a Mainland Exit

While some chains are sprinting ahead, others are stepping back.

KURA Sushi’s peak attention in China came in 2023, when it floated an ambitious plan to open 100 stores in 10 years. Yet after launching its first mainland store in June 2023, it opened only three locations—all in Shanghai.

In June 2025, KURA Sushi announced through Asia Kura Sushi Co., Ltd. that its board had considered changes in the international economic environment and, after evaluating overall future development, decided to gradually end operations across all Shanghai stores. The company stated this would not materially impact its finances or operations—effectively confirming its exit from mainland China.

According to Asia Kura Sushi’s fiscal 2024 financial report (ending September 2024), net profit after tax was 108 million yuan, down 49% year-on-year. The announcement clearly attributed the decline largely to weak performance in the mainland China business.

A Chinese resident working in Japan told reporters: “KURA Sushi is everywhere in Japan. It’s the third-largest conveyor-belt sushi chain by store count—Sushiro is number one, Hama Sushi is number two. In Japan, I don’t feel there’s a huge difference; people typically just go to whichever one is closest.”

So why did the story turn into such a stark “two worlds” situation in China?

Zhu Ruishi believes KURA’s China launch struggled partly because it copied the Japan model almost pixel-for-pixel, without adjusting its menu and value proposition to Chinese market realities. “First, the pricing was relatively higher. Second, the product variety wasn’t rich enough. These two factors contributed to poor operations in China,” he said.

Earlier reporting often highlighted that KURA’s per-plate pricing in Shanghai was more than double its Japan price. Not long after opening, KURA launched promotions in August 2023 to lower dishes to 10 yuan per plate, and in October 2024 the brand posted again saying items had dropped to 8 yuan per plate.

Chinese food industry analyst Zhu Danpeng argues KURA’s deeper issue may have been a misaligned market position. “Whether through online content or travel experiences, many Chinese consumers have a clear sense of this brand’s positioning. If it’s perceived as ‘double standards,’ consumers won’t accept it,” he said. Once shoppers broadly believe a brand is “taking advantage” of them, the damage to brand trust can be severe.

Asia Kura Sushi’s financial disclosures show its Shanghai subsidiary lost 29.17 million yuan in 2023, with losses widening to 37.83 million yuan in 2024. In the first quarter of 2025, it lost another 14.90 million yuan—bringing cumulative recognized losses to 81.90 million yuan.

That said, company representatives have reportedly stated they will continue monitoring the economic and business environment before making further judgments about future mainland plans. President Kunihiko Tanaka has also publicly said the company hopes to keep learning and to seek opportunities to reopen stores in mainland China in the future.

The Localization Test—and What Happens After the Hype

A young consumer who recently tried several chains admitted: “I queued for Sushiro and Hama Sushi a few times. I don’t usually love sushi that much—I was definitely influenced by social media. Reports about long lines also boosted the topic’s popularity and made it feel more ‘rare’ and worth chasing.”

Today’s young consumers in China have more choices and more diverse expectations. They are enthusiastic about trying new things, which creates short-term demand surges for emerging categories and newly arrived brands.

But can the budget sushi boom last?

It’s hard to ignore that Sushiro’s queue wave has been amplified by traffic-driven hype, scalpers, and the “first-try effect.” When the tide recedes, how can it avoid repeating KURA’s path?

Zhu Ruishi notes that beyond pricing, Sushiro offers a broader menu and also introduces more Chinese-style items—giving diners more options.

In “menu localization,” Sushiro has noticeably reduced the share of raw fish and increased cooked offerings. Some media reports say sashimi accounts for about 40% of Sushiro’s menu in Japan, but only around 20% in China. By comparison, KURA’s raw fish proportion exceeds 25%, and its overall menu structure is much closer to Japan’s.

Zhu Danpeng adds that the deeper logic behind China’s increasingly intense restaurant competition is an overall upgrade in competitive standards—driven by consumers pushing the industry forward. In the past, people might have felt “as long as there’s food, it’s fine.” But as more consumers travel abroad and experience global cuisines, they benchmark and compare. This places higher demands on imported categories and overseas brands.

“China is a massive consumer market globally. Unless they have no choice, few companies want to give it up,” said a consultant interviewed by reporters. “But the market is complex and competition is fierce, which many foreign firms struggle to handle. That’s also why we’ve seen more foreign businesses selling stakes recently—finding local partners can be one viable solution.”

Despite intensifying competition, China’s market potential remains substantial. According to National Bureau of Statistics data, China’s total catering revenue in 2024 reached 5.5718 trillion yuan, up 5.3% year-on-year. This growth outpaced the increase in total retail sales of consumer goods that year, reflecting the sector’s resilience and vitality.

Zhu Danpeng emphasizes that success ultimately hinges on several fundamentals: first, the completeness of the industry chain and the maturity of the supply chain; second, stable product quality—many restaurant businesses fail because consistency breaks down. Food safety, in particular, has become a top priority for Chinese consumers, and standards are even stricter for Japanese cuisine and sushi categories.