Business interruption caused by economic downturns, shrinking demand and natural disasters

「Consumer concerns about protecting their household finances grew further amid uncertainty surrounding the situation in the Middle East and a succession of price increases for household goods, and the outlook remained uncertain.」

「Although employment and income conditions in Japan improved, the outlook remained uncertain due to concerns about further price increases and the effects of U.S. trade policy, among other factors, and consumers’ preference for saving on food continued.」

「In the environment surrounding the food business, consumers became increasingly focused on protecting their household finances as prices of daily necessities rose, and their preference for saving continued. Meanwhile, the eating-out market showed a growth trend due in part to increased inbound traffic.」

「Meanwhile, concerns about soaring resource prices and higher prices intensified, and consumers’ preference for saving continued to strengthen.」

「Although prices continued to rise, albeit moderately, due in part to the weaker yen, consumers remained inclined to economize on eating at home. Meanwhile, demand for eating out recovered to levels approaching those before COVID-19, supported by the resumption of events, school festivals and local festivals, among other factors, and changes were observed in consumers’ perceptions of value when making purchases.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「Following the reclassification of COVID-19 as a Class 5 infectious disease, opportunities to go out increased substantially, and demand for eating out and inbound consumption recovered. On the other hand, consumer sentiment remained sluggish due to higher prices of food, daily necessities and other goods, and the situation continued to be uncertain.」

「Personal consumption remained uncertain, as the higher prices of energy, food and daily necessities strengthened consumers’ preference for saving.」

「From July 2022, the number of new infections reached a record high and the seventh wave peaked as the virus spread through variants. Raw material and fuel prices also surged due to the prolonged situation in Ukraine and the rapid depreciation of the yen.」

「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「The effects of COVID-19 were significant, and the situation remained uncertain as the Company worked to respond to changing social conditions, particularly following the emergence of variants with different levels of transmissibility and characteristics.」

「Variants such as Omicron emerged following the Delta variant, further contributing to an uncertain outlook. Unlike the previous year, there was no special demand from an increase in eating-at-home demand. In the eating-out market, restrictions on activities continued, and changes in lifestyles caused by prolonged limits on the number of people, shortened operating hours and suspension of alcohol service hindered the recovery of sales, creating a challenging environment for the Group.」

「The effects of COVID-19 continued. Although the rollout of vaccinations provided some positive signs, economic activity remained constrained, and the outlook continued to be uncertain due to requests from the authorities to refrain from certain activities and to suspend or shorten operating hours in the eating-out market.」

「The spread of COVID-19 has resumed due to the effects of highly transmissible variants and a slowdown in the pace of vaccinations, making it increasingly difficult to predict when the situation will converge. …The recovery of the eating-out market has also been difficult due to repeated requests from the authorities to suspend business and shorten operating hours.」

「The market environment surrounding the Group remains extremely challenging due to the stagnation of economic activity caused by the spread of COVID-19.」

「During the second quarter of the current consolidated cumulative period, the market environment surrounding the Bull-Dog Sauce Group has been gradually returning to normal after a period in which economic activity was severely restricted by the spread of COVID-19, including people refraining from eating out, a sharp decline in visitors from overseas and sluggish domestic tourism caused by restrictions on domestic travel. However, the outlook for consumer spending and the economy remains uncertain.」

「During the first quarter of the current consolidated cumulative period, economic activity in Japan was significantly constrained by the spread of COVID-19, consumer spending slowed, and the outlook for the economy became extremely uncertain. In the food industry, consumer behavior changed on an unprecedented scale, including a substantial decline in demand for eating out and an increase in demand for eating at home.」

「Natural disasters, the spread of infectious diseases and other events may adversely affect the financial position and operating results of the Group through temporary production stoppages and other effects. Suppliers of raw materials and auxiliary materials may likewise suffer adverse effects if they are affected by a disaster or have cases of viral infection, among other events.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「In the food industry, preferences for low prices and economizing continue, partly because of the effects of a prolonged rainy season and natural disasters such as typhoons, and the market environment remains uncertain.」

「During the third quarter of the current consolidated fiscal year, Japan’s economy bottomed out as the deterioration caused by natural disasters subsided, while declining crude oil prices had a positive effect. The manufacturing sector remained on a moderate recovery trend, but personal consumption continued to be unstable amid uncertainty over U.S. trade policy and other factors.」

「During the second quarter of the current consolidated fiscal year, rising raw-material prices, along with disruptions to logistics networks and declines in production caused by natural disasters, became factors reducing the performance of major companies. In the manufacturing sector, sentiment weakened because of uncertainty arising from U.S.-China trade frictions and concerns about a slowdown in the Chinese economy. The food industry also continued to face a challenging market environment, as personal consumption was depressed by fewer opportunities to go out because of poor weather, while preferences for low prices and economizing continued.」

「During the first quarter of the current consolidated fiscal year, Japan’s economy remained on a moderate recovery trend, but personal consumption continued to face an uncertain outlook because the recovery in income remained sluggish.」

「Although personal consumption is expected to remain relatively resilient, the outlook is expected to remain uncertain because of concerns that personal consumption could stagnate as real wages decline, against a backdrop of uncertainty over U.S. trade policy, a stronger yen and rising costs associated with higher crude oil prices and labor costs.」

「Although household consumption in the food industry is gradually recovering, the economic outlook remains uncertain, as purchasing power is expected to decline due to rising food prices, among other factors.」

「Although personal consumption in the food industry is showing signs of recovery, preferences for low prices and economizing continue, and the market environment remains uncertain.」

「Similar adverse effects may also result if suppliers of raw materials and auxiliary materials suffer damage, making it impossible to manufacture the Company’s products.」

「The food industry also continues to face a challenging business environment, with no clear prospect of an end to deflation or sustainable growth against a backdrop of consumers’ preference for economizing.」

「The food industry also continues to face a challenging market environment, owing to sluggish growth in real wages, stagnant personal consumption and a growing preference for low prices and economizing.」

「During the first quarter of the current consolidated fiscal year, Japan’s economy remained in a situation where consumers continued to favor economizing, although signs of recovery were seen in some areas, amid concerns about the effects of the Kumamoto Earthquake and the slowdown in overseas economies.」

「Demand for the products that generate the Group’s operating revenue is affected by changes in economic conditions, and an economic contraction and shrinking demand are possible. In addition, the Group has offices and factories throughout Japan, and earthquakes, typhoons and other natural disasters could prevent normal business activities and adversely affect the Group’s business results and financial condition.」