Decline in Customer Numbers and Operating Restrictions Due to COVID-19

「If a new infectious disease equivalent to or more severe than COVID-19 emerges in the future and restrictions on activities are imposed again, our group’s business performance and financial position may be significantly affected.」

「During the previous COVID-19 pandemic, the government and other authorities implemented declarations of a state of emergency and priority preventive measures to prevent the spread of disease on multiple occasions. We responded to requests from the authorities to shorten business hours and suspend the serving of alcoholic beverages, which significantly affected our group’s business performance and financial position. If a new infectious disease equivalent to or more severe than COVID-19 emerges in the future and restrictions on activities are imposed again, our group’s business performance and financial position may be significantly affected.」

「During the third quarter cumulative consolidated period from 1 April 2023 to 31 December 2023, COVID-19 was reclassified as a Category 5 disease under the Infectious Diseases Control Law, and consumer activity was on a moderate recovery trend as the movement of people within Japan recovered.」

「During the second quarter cumulative consolidated period from 1 April 2023 to 30 September 2023, domestic consumer activity was on a recovery trend as COVID-19 was reclassified as a Category 5 disease under the Infectious Diseases Control Law on 8 May and the number of visitors to Japan increased.」

「Restrictions were eased in stages, including the lifting on 29 April of border measures for arrivals associated with COVID-19 and the reclassification of the disease as a Category 5 disease under the Infectious Diseases Control Law, and domestic consumer activity was on a recovery trend.」

「During the fiscal year, the Japanese economy was gradually recovering as restrictions on activities associated with COVID-19 were progressively eased and economic activity began to recover moderately.」

「During the third quarter of the current consolidated cumulative period (1 April 2022 to 31 December 2022), Japan's economy had been gradually recovering since April following the lifting of restrictions on activities related to COVID-19. However, the outlook remained uncertain due to the resurgence of infections caused by the seventh and eighth waves of COVID-19 from July 2022, the global surge in resource and raw-material prices resulting from the situation in Ukraine, and the additional rise in import prices caused by the sharp depreciation of the yen.」

「Although the food service industry was able to enter its first Golden Week and summer holiday period in 3 years without restrictions on business operations, challenging conditions have continued due to lower consumer sentiment caused by the seventh wave of COVID-19, soaring raw-material prices and utility costs resulting from the weaker yen, and rising labor costs.」

「Although the food service industry was able to enter its first Golden Week in 3 years without restrictions on business operations, the surrounding environment remains challenging due to changes in consumers' lifestyles and increases in procurement prices, utility costs, and logistics expenses resulting from soaring raw-material and crude-oil prices.」

「The company’s performance for the fiscal year was significantly affected by the spread of COVID-19. At present, the timing of the end of the COVID-19 pandemic remains uncertain. We recognize that this risk has already materialized.」

「Furthermore, with Japan's first domestic case of the Omicron variant confirmed on 30 November, uncertainty surrounding the recovery of business performance remains difficult to dispel.」

「During the second quarter cumulative consolidated period, the Japanese economy remained uncertain. Repeated declarations of a state of emergency and priority preventive measures to prevent the spread of disease were implemented as COVID-19 resurged, and economic activity was constrained by requests to refrain from nonessential, nonurgent outings. The economic recovery remained slow despite progress in vaccinations. In the restaurant industry, the business environment became extremely difficult due to requests to shorten business hours and restrictions on serving alcoholic beverages.」

「During the first quarter cumulative consolidated period from 1 April 2021 to 30 June 2021, the Japanese economy remained in difficult conditions as the resurgence of COVID-19 led to a third declaration of a state of emergency in some regions and the implementation of priority preventive measures to prevent the spread of disease, while consumer spending declined.」

「In the food service industry, customer traffic had begun to recover temporarily from October as a result of the government's Go To Eat campaign. However, the operating environment became extremely challenging due to requests from local authorities to repeatedly shorten business hours, calls for people to refrain from going out to prevent the spread of COVID-19, and the disappearance of inbound demand.」

「The food-service industry is also experiencing a very challenging and uncertain operating environment due to a sharp decline in demand for eating out associated with COVID-19 and signs of a second wave of infections emerging from July onward.」

「The restaurant industry was also forced to close or shorten business hours following the government’s declaration of a state of emergency in April 2020. Consumer sentiment had not recovered even after the state of emergency was lifted in May, and difficult conditions continued.」

「As COVID-19 spreads, our group’s business performance may be affected if customer numbers decline due to requests to refrain from going out or if we are forced to suspend restaurant operations or shorten business hours. We recognize that the likelihood of this risk materializing is high and that the relevant period has already arrived.」