Japan's small izakaya restaurants are collapsing at a historic rate—118 bankruptcies in H1 2026 alone, with over 90% involving venues with fewer than 10 staff. Rising food costs (bonito prices up 3–4x in 2 years), utilities, rents, and thin margins leave owners unable to raise prices without losing customers. Large chains with tech infrastructure and supply-chain optimization continue thriving, while SME owners lack capital for automation and data analytics. A planned consumption tax cut (8% to 1% on food from April 2026) may further drive customers to supermarkets instead of sit-down dining—a structural threat, not just pricing.