Business Performance Risks from Competition to Open Stores, Including by Companies from Other Industries, and Market Trends

「In March, Maxvalu Kanto Co., Ltd., a Group subsidiary, integrated the Kanto operations of Daiei Co., Ltd. and Aeon Market Co., Ltd., resulting in the launch of “Aeon Food Style Co., Ltd.” This brought food retail sales above ¥1 trillion, and we will pursue further Group growth by maximizing the benefits of the integration and accelerating investment in existing stores, with the aim of establishing a top-tier position in the Tokyo metropolitan region.」

「It is expected to fall below plan due to the impact of pricing measures taken against a backdrop of rising prices and intensifying competition.」

「The cost-push inflation is expected to continue, and competition across business formats in the Tokyo metropolitan area is expected to intensify, while the outlook for social conditions remains uncertain, so the environment surrounding our Group's business is expected to become increasingly challenging.」

「AEON, Inageya and our company need to continue responding rapidly to customer needs, coexisting with local communities and growing together with them in the Tokyo metropolitan area, where competition is expected to intensify further,」

「Furthermore, as competition in the environment in which we operate is intensifying across business formats and the effects of the declining birth rate and aging population are foreseeable, it has become an urgent priority to redefine our business areas and markets, including by transforming the business into OMO through the integration of digital and physical operations.」

「We believe that customer numbers have been affected by the diversification of people's lifestyles following the lifting of COVID-related restrictions and the spread of remote work, the increased entry of various businesses into the market across business formats, and the growth of channels such as EC and delivery, and will continue to strengthen measures to address these factors.」

「We believe that customer numbers have been affected by the diversification of people's lifestyles following the lifting of COVID-related restrictions and the spread of remote work, the increased entry of various businesses into the market across business formats, and the growth of channels such as EC and delivery, and plan to strengthen measures to address these factors.」

「We believe that customer numbers have been affected by intensifying price competition, the growth of EC, and new channels such as delivery, and plan to strengthen measures to address these factors.」

「We recognize that the competitive environment surrounding our company is no longer limited to competition among supermarkets, but is increasingly characterized by competition across business formats, making it urgent to transform the business into OMO through integration with digital services.」

「We recognize that the Tokyo metropolitan area, where our Group primarily operates, is both an area with a high risk of COVID-19 infection and a fertile, promising market, and that competition in the market is intensifying further beyond competition among supermarkets alone.」

「In addition to the continued opening of discount stores, drugstores and other businesses in the food markets of the regions where the Company operates stores, which significantly changed the competitive environment, unseasonable weather in July and typhoons in September and October forced some stores to close or shorten their operating hours. As a result, existing-store sales were 98.8% of the prior-year level and customer numbers were 98.5%.」

「We recognize that competition has intensified further since the consumption tax increase and that we are being pressed to undertake reforms.」

「During the cumulative second-quarter consolidated period, discount stores, drugstores and other outlets continued to open in the food markets in the regions where we operate stores, and sales remained at 98.1% of the prior-year level at existing stores, while customer numbers remained at 97.9%.」

「However, with an increase in the consumption tax rate scheduled for October 2019, customers were expected to become increasingly focused on economizing, while competition was expected to intensify further, requiring a response.」

「Under these conditions, sales for the cumulative first-quarter consolidated period remained at 98.2% of the prior-year level at existing stores and 100.4% across all stores, as food spending remained sluggish and the competitive environment became more severe, but」

「Sales failed to gain traction due to fluctuations in fresh-produce market prices, including the prolonged weakness in vegetable prices, and changes in the competitive environment,」

「The supermarket industry is facing intensifying competition for new store locations, including from companies in other industries, and is also susceptible to economic conditions, trends in personal consumption, amendments to the Consumption Tax Act and other legislation, and abnormal weather. If competing stores continue to open in the dominant areas of our Group, this could affect our Group's sales and business performance.」