Once a nationwide craze, izakayas now face wave of closures as customers stay away

"Even with price discounts, there are days when not a single customer walks in," one izakaya owner said.

Japanese-style izakayas, which once sparked a nationwide craze in South Korea, are now facing a wave of closures. In Japan, bankruptcies in the sector have hit a record high for the first half of the year, and the venues have lost much of their former popularity in South Korea as well.

Rising prices, weakening consumer sentiment and shifting drinking culture have combined to push small izakayas out of business one after another. Some customers have grown vocal in their dissatisfaction, complaining that the food is overpriced and underwhelming.

According to the Nikkei, Tokyo Shoko Research (TSR), a Japanese credit research firm, recorded 118 izakaya operator bankruptcies in the first half of this year — the highest first-half figure since the firm began tracking the data in 1989.

More than 90 percent of the bankrupt operators were small businesses with fewer than 10 employees. TSR said the full-year izakaya bankruptcy count is likely to surpass all previous annual records.

In Japan, izakayas are widely regarded as a working-class staple, known for affordable bar snacks and all-you-can-drink deals called "nomihodai." In South Korea, however, they are not particularly cheap compared with other dining options.

As ingredient costs, labor expenses and rent have all risen, many izakayas have cut corners to control costs — only to see quality and customer satisfaction fall, driving away patrons in a vicious cycle. Owners also fear that raising prices will accelerate the exodus.

Office worker Yu said poor value for money was the main reason she stopped visiting izakayas. "The portion sizes and quality just aren't what they used to be," she said.

The spread of mukbang — online eating broadcasts — and a broader push to cut living expenses have also led more people to buy ready-made food and drink at home instead of going out to an izakaya.

Meanwhile, a 2025 restaurant closure report by Teikoku Databank, a Japanese corporate credit research firm, found that restaurant closures in Japan last year reached 900, a record high. Bars and beer halls — the category that includes izakayas — accounted for more than 30 percent of that total.