Contraction of the karaoke and food-service markets and intensifying competition

「Food-service business [all stores]　Net sales (%)　74.6　Number of customers (%)　68.8」

「As consumers became increasingly cost-conscious amid the continued depreciation of the yen and soaring raw material and utility costs, the company proceeded with measures including closing unprofitable stores and worked to reduce fixed costs.」

「Food-service business [existing stores] April May Net sales (%) 91.1 87.8 Number of customers (%) 85.6 85.7 Average spend per customer (%) 106.4 102.5」

「In the karaoke and food-service businesses, demand has not returned to pre-pandemic levels due to changes in consumer lifestyles, and difficult conditions continue. In addition, various costs, including raw materials, utilities and logistics, as well as personnel expenses rising due to labor shortages, are expected to increase, and the recovery has been slower than expected.」

「In the karaoke and food-service businesses, although the impact of COVID-19 has subsided, pre-pandemic lifestyles have not returned, and conditions have not reached the point where a full recovery can be said to have been achieved. In addition, various costs, including raw materials, utilities and logistics, as well as personnel expenses rising due to labor shortages, are expected to increase, and the recovery has been slower than expected.」

「Although restrictions on activities were eased following the reclassification of COVID-19 under the Infectious Diseases Control Law to Category 5, revenue is on a recovery trend amid stronger consumer cost-consciousness due to soaring resource prices, the yen's depreciation and rising prices. However, the recovery has been gradual because of weak late-night demand and demand for second-party venues.」

「In the karaoke business, signs of a recovery were seen following the easing of activity restrictions related to COVID-19. However, concern remains over sluggish personal consumption caused by soaring resource prices, the yen's depreciation and rising prices. Against this backdrop, revenue is on a recovery trend from the impact of COVID-19, but the business continues to face difficult conditions due to weak late-night demand and demand for second-party venues.」

「In the karaoke business, signs of a recovery were seen following the easing of activity restrictions related to COVID-19. However, concern remains over sluggish personal consumption caused by soaring resource prices, the yen's depreciation and rising prices.」

「In the karaoke and food-service businesses, the recovery has been slower than expected due to business customers refraining from using these services, including voluntarily avoiding large gatherings and banquets, as a result of prolonged measures to prevent the spread of COVID-19.」

「In the karaoke and food-service businesses operated by the group, the recovery has been slower than expected due to business customers refraining from using these services, including voluntarily avoiding large gatherings and banquets, as a result of prolonged measures to prevent the spread of COVID-19.」

「In the karaoke business, consumption had begun to recover as the seventh wave of COVID-19 subsided, but the recovery in consumption stagnated following a renewed spread of COVID-19. Concern also remains over sluggish personal consumption caused by soaring resource prices, the yen's depreciation and rising prices.」

「In the karaoke business, signs of a recovery were seen following the easing of activity restrictions related to COVID-19. However, concern remains over sluggish personal consumption caused by soaring resource prices, the yen's depreciation and rising prices.」

「Restrictions on store operations, including temporary store closures and shortened operating hours resulting from the issuance of declarations of a state of emergency and priority preventive measures to prevent the spread of disease, were lifted. Although the number of customers visiting stores and other indicators have gradually recovered in the karaoke and food-service businesses, the outlook for a return to pre-pandemic levels remains uncertain, and the company continued to report an operating loss during the cumulative first quarter under review, following the previous consolidated fiscal year.」

「The karaoke business continued to face a challenging operating environment as repeated declarations of a state of emergency and priority preventive measures to prevent the spread of COVID-19 led to restrictions on operations, including temporary closures and shortened operating hours. Even after the requests were lifted, the recovery in customer traffic has been delayed by the emergence of COVID-19 variants.」

「During the cumulative second quarter under review, personal consumption declined significantly as requests to refrain from going out continued intermittently following repeated declarations of a state of emergency in response to COVID-19, resulting in an uncertain outlook.」

「During the cumulative first quarter under review, Japan's economy remained in an uncertain situation as the spread of COVID-19, which had continued since the previous consolidated fiscal year, showed no sign of abating, significantly restricting personal consumption and economic activity.」

「The karaoke business faced a challenging operating environment due to requests to refrain from going out and requests to shorten operating hours to prevent the spread of COVID-19. The recovery in customer traffic has been delayed due to continued caution over the fourth wave of infections. As a result, revenue was ¥3,169.417 million, down 53.6% year on year, and the segment loss was ¥1,271.276 million, compared with segment profit of ¥569.271 million in the same period of the previous year.」

「The karaoke business faced a difficult operating environment due to requests to refrain from going out and requests to shorten operating hours to prevent the spread of COVID-19. Even after the requests were lifted, the recovery in customer traffic has been slow because of concerns about a third wave of infections and other factors.」

「The karaoke business faced a difficult operating environment due to requests to refrain from going out and requests to shorten operating hours to prevent the spread of COVID-19. Even after the requests were lifted, the recovery in customer traffic has been slow because of concerns about a second wave of infections and other factors.」

「In the karaoke business, in response to the government’s declaration of a state of emergency on 7 April 2020 due to the spread of COVID-19, we temporarily closed our stores until requests from each prefecture to suspend operations were lifted, in an effort to prevent further infections. As a result, revenue was ¥502,449 thousand, down 70.5% year on year, and the segment posted a loss of ¥296,400 thousand, compared with segment profit of ¥167,627 thousand in the same period of the previous year.」

「The karaoke and food-service businesses were forced to temporarily close or shorten their operating hours due to the spread of COVID-19 and were significantly affected in terms of business performance. Even after reopening, consumer sentiment has recovered slowly, and it remains unclear how long it will take to return to normal operating conditions.」

「However, customer traffic slowed as a result of a series of natural disasters, including torrential rain in northern Kyushu in August and a large typhoon hitting the Tokyo metropolitan area in September, as well as the Rugby World Cup 2019 Japan tournament held from September to November, which attracted considerable public attention, and the consumption tax increase beginning in October.」

「The leisure and food-service markets are both tending to contract due to factors including declining consumer appetite amid concerns about the economic outlook and intensifying price competition resulting from competition among numerous operators. The operating environment surrounding our group’s karaoke and food-service businesses therefore remains difficult.」

「In the karaoke business, we worked to increase customer traffic by actively sending coupons and other offers via social media, but customer traffic was affected by the high level of interest in the 2018 FIFA World Cup Russia, which began on 14 June.」

「However, due to the Kumamoto Earthquake in April, 3 stores in the prefecture were closed for approximately 1 week, and customer traffic declined across the Kyushu region. As a result, revenue was ¥6,126,417 thousand, down 5.5% year on year, while segment profit was ¥553,976 thousand, up 5.8%.」

「However, due to the Kumamoto Earthquake in April, 3 stores in the prefecture were closed for approximately 1 week, and customer traffic declined across the Kyushu region. As a result, revenue was ¥4,002,710 thousand, down 5.1% year on year, and segment profit was ¥249,870 thousand, down 17.5%.」

「Against the backdrop of a declining trend in customer numbers due in part to the impact of the consumption tax increase」

「The leisure and food-service markets are both tending to contract due to factors including declining consumer appetite amid concerns about the economic outlook and intensifying price competition resulting from competition among numerous operators. The operating environment surrounding our group’s karaoke and food-service businesses therefore remains difficult.」