noun
Colloquial term for a casual dining place, often implying a cozy or unpretentious atmosphere.
駅前に新しい居食屋ができたんだって。
I heard a new eatery opened in front of the station.
あの居食屋はランチが安くて美味しいよ。
That restaurant has cheap and tasty lunches.
レストラン is a general loanword for restaurant, often implying a Western-style or slightly more formal setting, whereas 居食屋 feels more casual and Japanese.
A modern colloquial coinage blending 居 (い, 'stay') and 食 (しょく, 'eat') with 屋 (や, 'shop'), suggesting a place where one can comfortably stay and eat. The exact origin is uncertain, but it follows a pattern of casual shop names.