Hikari Food Service Co., Ltd. (138A) Stock Price

Hikari Food Service is a company based in Nagoya that operates a chain of standing bar restaurants. Under the philosophy of "wanting to encounter as many smiles and laughter as possible," the company operates casual dining establishments for everyday use. Its primary service is operating standing bar-style restaurants in small storefronts of approximately 10 tsubo (about 330 square feet), targeting salaried workers in their 30s to 50s.

The company's revenue structure consists of three operating formats: company-operated stores, commissioned stores, and franchise stores. As of November 2025, the company operates a total of 68 stores comprising 43 company-operated stores, 9 commissioned stores, and 16 franchise stores, with sales from company-operated stores serving as the primary revenue pillar. The company also generates revenue from franchise fees and royalties from franchise stores.

The company operates four major brands. "Daikoku," its largest brand, operates 50 stores offering grilled offal starting at 99 yen per skewer at affordable prices. "Uotsubaki" is a 14-store format where customers can enjoy fresh seafood tempura and sashimi in a standing bar style. Additionally, the company operates "Kanayamaya," a 3-store ramen concept featuring pork bone soy sauce-based broth, and "Yakiniku Marui Seininikuten," a 1-store butcher-operated grilled meat restaurant, building a diversified business portfolio that addresses varied dining preferences.

Hikari Food Service promotes a unique growth strategy centered on small-format standing bar restaurants under the slogan "10-Tsubo Innovation." The company's long-term vision is "Perpetual Growth: 600 Stores," aiming to achieve 600 locations nationwide while ensuring the company's continued existence. The company seeks to maximize sales efficiency through growth of existing stores and expansion of new openings, targeting stable and sustainable growth. Key performance indicators include the number of loyal customers visiting more than 60 times annually, year-over-year existing store sales, and the number of company-operated locations, which drive continuous business expansion.

The company's differentiation strategy centers on utilizing 10-tsubo (approximately 330 square feet) small-format stores. Operating three 10-tsubo stores generating 3.5 million yen in monthly sales is more cost-efficient than operating one 30-tsubo store generating 10 million yen monthly, as it reduces fixed costs, lowers break-even points, and minimizes risk. The company's site selection capability enables openings from 4-tsubo locations, capturing real estate opportunities competitors cannot access and reducing rent ratios. Grilled skewers, the flagship product, remain timeless and adaptable to creative offerings. Their relatively simple preparation reduces kitchen space requirements, allowing larger seating areas and faster service delivery.

For new market development, the company plans to expand beyond current operations in Nagoya, the Kanto region, and Hiroshima into additional regions. While pursuing a dominant strategy in existing areas with remaining expansion potential, the company targets continuous growth. Brand value enhancement enables diverse store formats, including mezzanine seating patterns and counter-only 10-tsubo formats at non-major stations, expanding candidate locations. Beyond "Yakitori Daikoku," the company operates "Tachigui Sakana Tsubaki," featuring seafood and tempura, establishing a multi-format risk mitigation system against food-related crises such as BSE.

For technological innovation and operational efficiency, the company utilizes central kitchen sourcing and food processing systems with quality control based on hygiene management manuals. Regular internal audits ensure compliance with current regulations and adaptation to new regulatory changes, strengthening hygiene and quality management systems. On the human resources front, securing talented employees who understand corporate values is the top priority, with active recruitment including scout hiring. Enhanced training programs for store managers and staff improve store operations and support the mission of "maximizing customer lifetime value."