We assign Buy ratings to two major restaurant operators: Both companies look attractive in overcoming industry issues

Research evidence excerpt

We assign Buy ratings to two major restaurant operators: Both companies look attractive in overcoming industry issues

We assign Buy ratings to two major restaurant Global Markets Research

operators 21 July 2026

EQUITY: JAPAN RETAILING

Both companies look attractive in overcoming Research Analysts

industry issues Japan retailing Yusuke Sakamoto - NSC

Growth stories that transcend mature Japanese market revolve around yusuke.sakamoto@nomura.com

overseas expansion and M&A +81 3 6703 1226

We assign Buy ratings to two major restaurant operators

We assign Buy ratings to Zensho Holdings [7550] and Food & Life Companies [3563] at

target prices of ¥10,800 and ¥6,600 respectively. At the same time, we summarize the

appeal of these two companies based on developments and talking points within the

restaurant industry.

We think sustained growth at restaurant operators will hinge on: (1) their ability to expand

overseas; and (2) business domain expansion and market share gains driven by M&A.

Major restaurant operators used to grow by proactively opening new stores in Japan.

However, Japan's population peaked in 2008 and is almost certain to fall below 100mn by

2050. The restaurant industry is facing a triple whammy of weaker consumer sentiment in

Japan, cost inflation, and labor shortages. Given these social issues, we are skeptical

about any equity story involving growth via further store openings in Japan in existing

formats. While some small caps might have some growth potential thanks to scope for

growth in Japan, larger companies will probably find it proportionately more difficult to

appeal to investors on these grounds. We see appeal in Zensho Holdings and Food & Life

Companies as companies that can overcome these industry issues and achieve sustained

growth.