Sluggish growth in real consumption and labor shortages in domestic-demand-driven service industries

「Household consumption, which drives domestic demand, continues to struggle amid caution over high prices and a stronger focus on protecting household finances. In addition, persistently high procurement costs and rising labor costs caused by a serious labor shortage continue to weigh on corporate management. The outlook therefore remains uncertain for domestic-demand service industries such as food service and retail, which are the Company's major customers.」

「During the first half, although the rate of increase in the consumer price index in Japan had begun to slow, household consumption, the main driver of domestic demand, remained sluggish as consumers stayed wary of high prices and focused on protecting their living standards. In addition, persistently high procurement costs and rising labor costs caused by a severe labor shortage continued to weigh on corporate management, and the outlook remained uncertain for domestic-demand-oriented service industries such as food service and retail, which are among the Company's main customers.」

「Household consumption, which drives domestic demand, continues to struggle amid a growing sense of burden and caution regarding the price increases to date. In addition, higher procurement costs resulting from the situation in the Middle East and elsewhere, as well as rising labor costs caused by a serious labor shortage, are weighing on corporate management. The outlook therefore remains uncertain for domestic-demand service industries such as food service and retail, which are the Company's major customers.」

「The business environment surrounding service industries that are customers of our group was severely undermined by COVID-19. Although it moved onto a recovery track following the reclassification of COVID-19 as a Class 5 infectious disease, the environment remained challenging due to new factors including high and persistently elevated raw material prices, weak household consumption resulting from the prolonged decline in real wages, labor shortages, and rising labor costs. However, as passing on price increases began to be accepted to some extent, conditions finally began to move toward a recovery.」

「During the first half under review, real wages showed some recent improvement. However, sluggish household consumption, the driver of domestic demand, rising labor costs associated with labor shortages, and persistently elevated energy and raw material prices placed pressure on corporate management. The domestic-demand service industries such as food service and retail that are our main customers continued to face an uncertain environment.」

「During the first quarter under review, household consumption, the driver of domestic demand, remained sluggish due to the prolonged weakness in real wages. In addition, labor shortages and the resulting increase in labor costs, as well as persistently elevated energy and raw material prices, placed pressure on corporate management. Although conditions improved somewhat through the passing on of price increases, the domestic-demand service industries such as food service and retail that are our main customers continued to face an uncertain environment.」

「The environment remained challenging due to new factors including high and persistently elevated raw material prices, weak household consumption resulting from the prolonged decline in real wages, labor shortages, and rising labor costs. However, as passing on price increases began to be accepted to some extent, conditions finally began to move toward a recovery.」

「During the cumulative third quarter under review, household consumption, the driver of domestic demand, remained sluggish due to the prolonged weakness in real wages accompanying rising prices. In addition, increasingly severe labor shortages and rising energy and raw material prices placed pressure on corporate management, and service industries such as food service and retail, which are our main customers, continued to face an uncertain environment.」

「During the first half under review, Japan's economy was on a recovery track following the reclassification of COVID-19 as a Class 5 infectious disease. However, sluggish consumption due to rising prices and weak real wages, as well as increasingly severe labor shortages, placed pressure on corporate management, and the service industries such as food service and retail that are our main customers continued to face an uncertain environment.」

「During the first quarter under review, the recovery in human mobility following the decision to reclassify COVID-19 as a Class 5 infectious disease and other factors strengthened signs of a recovery. However, rising energy and raw material prices, reduced purchasing due to weak real wages, and increasingly severe labor shortages placed pressure on corporate management, leaving service industries such as food service and retail, which are our main customers, in an uncertain environment.」

「During the cumulative third quarter under review, the impact of COVID-19 eased following the lifting of activity restrictions. However, cost-push inflation caused by soaring energy and imported raw material prices placed pressure on corporate earnings and household real income. In addition, although the yen's depreciation benefited exports, it was an additional source of cost increases for domestic-demand industries. The challenging environment therefore continued for service industries such as food service and retail, which are our main customers.」

「During the first half under review, the impact of COVID-19 eased somewhat following the lifting of activity restrictions. However, the yen's depreciation further accelerated the marked increase in energy and imported raw material prices resulting from the invasion of Ukraine, placing pressure on corporate earnings and household real income. GDP had still not recovered to its level before the consumption tax increase implemented in October 2019, and the challenging environment continued for domestic-demand service industries such as food service and retail, which are our main customers.」

「During the first quarter under review, the adverse effects of COVID-19 gradually eased following the nationwide lifting of priority preventive measures on 21 March 2022. However, soaring energy and imported raw material prices, accelerated by Russia's invasion of Ukraine, placed pressure on corporate earnings, household real income, and real consumption. Service industries such as food service and retail, which are our main customers, therefore remained in a challenging environment.」

「During the fiscal year under review, Japan's economy remained sluggish due to the prolonged spread of COVID-19 and the resulting requests for people to refrain from going out. Although household consumption improved somewhat following the lifting of activity restrictions in October, the reintroduction of priority preventive measures from January, together with soaring raw material prices, meant that the environment surrounding our main customers, particularly the food service industry, which had been forced to restrict operations, remained more challenging than ever.」

「During the cumulative third quarter under review, Japan's economy remained extremely challenging for an extended period, particularly in food service, entertainment, and lodging, due to the spread of COVID-19 and the resulting restrictions on activity and store operations. Although the decline in cases and the lifting of the declaration of a state of emergency and other measures finally brought signs of a recovery to service industries such as food service and retail, which are our main customers, they remained in an uncertain situation due to the emergence of new variants and other factors.」

「During the first half under review, demand, particularly for food service, entertainment, and lodging, continued to decline due to the spread of COVID-19 and the resulting restrictions on activity and store operations. Domestic-demand service industries such as food service and retail, which are our main customers, continued to face a challenging environment.」

「During the first quarter under review, Japan's economy showed signs of recovery in exports and consumer spending. However, demand for consumer services such as food service, entertainment, and lodging continued to decline due to the issuance and extension of the declaration of a state of emergency, the expansion of areas subject to priority preventive measures, and the resulting operating restrictions on stores. Domestic-demand service industries such as food service and retail, which are our main customers, therefore continued to face a challenging environment.」

「The business environment surrounding service industries that are customers of our group remained challenging due to weak household consumption and the spread of COVID-19. Accordingly, our group is expected to remain in a position requiring substantial effort to expand its business for some time.」

「During the cumulative second quarter under review, Japan's economy fell into an economic crisis described as potentially the worst since the Great Depression. In addition to the downturn caused by the consumption tax increase implemented last October, GDP declined sharply in the April-June quarter due to the spread of COVID-19. The impact on personal consumption was also severe, and the environment surrounding service industries such as food service and retail, which are our main customers, became more challenging than ever before.」

「During the cumulative first quarter under review, Japan's economy fell into an economic crisis described as potentially the worst since the Great Depression, due to the downturn caused by the consumption tax increase implemented last October and requests for people to refrain from going out and the declaration of a state of emergency accompanying the spread of COVID-19. The impact on personal consumption was also severe, and the environment surrounding service industries such as food service and retail, which are our main customers, became more challenging than ever before.」

「From late February onward, the expansion of requests for people to refrain from going out due to the increase in COVID-19 cases further worsened conditions, and the environment surrounding service industries such as food service and retail, which are our main customers, became extremely challenging.」

「During the cumulative third quarter under review, Japan's economy was further adversely affected by the consumption tax increase implemented while consumption remained weak and the slowdown in the global economy caused by US-China trade friction and other factors. The environment surrounding domestic-demand service industries such as food service and retail, which are our main customers, became increasingly challenging due to weak consumption and increasingly severe labor shortages.」

「During the cumulative second quarter under review, Japan's economy faced concerns about a global recession caused by the US-China trade war and other factors, as well as a further decline in domestic consumption following the consumption tax increase. Although some impact from last-minute demand was observed, both the consumer confidence index and the real wage index continued to decline. Combined with increasingly severe labor shortages, this meant that domestic-demand service industries such as food service and retail, which are our main customers, continued to face a challenging environment.」

「During the cumulative first quarter under review, Japan's economy had still not achieved an exit from deflation amid growing concerns about further declines in consumption if the consumption tax were raised and about the outlook for issues such as the US-China trade war. Domestic-demand service industries such as food service and retail, which are our main customers, also continued to face a challenging environment due to weak consumption resulting from the prolonged decline in real wages and increasingly severe labor shortages.」

「Domestic-demand service industries such as food service and retail, which are our main customers, continued to face a challenging environment due to the prolonged decline in real wages and the resulting weakness in household consumption, increasingly severe labor shortages, and the frequent natural disasters.」

「During the cumulative third quarter under review, Japan's economy had still not achieved an exit from deflation amid growing uncertainty in the global economy due to US-China trade friction and other factors. Domestic-demand service industries such as food service and retail, which are our main customers, continued to face a challenging environment due to prolonged weakness in household consumption, increasingly severe labor shortages, and the adverse impact on business performance of the natural disasters that occurred frequently during the second quarter of the fiscal year.」

「During the cumulative second quarter under review, Japan's economy became increasingly uncertain amid US-China trade friction and other factors. Although signs of a bottoming out in prolonged weakness in household consumption were evident in domestic-demand service industries such as food service and retail, which are our main customers, they continued to face a challenging environment due to the adverse impact on business performance from frequent natural disasters and increasingly severe labor shortages.」

「During the cumulative first quarter under review, Japan's economy remained uncertain due to high crude oil prices and trade friction. Domestic-demand service industries such as food service and retail, which are our main customers, continued to face a challenging environment amid prolonged weakness in household consumption and increasingly severe labor shortages.」

「Weak household consumption due to declining real wages has persisted, and, together with worsening labor shortages, the operating environment remains challenging for domestic-demand service industries, the company’s principal customers.」

「Although the Japanese economy showed signs of resilience and recovery during the nine months ended the third quarter, weak household consumption due to sluggish real wage growth has persisted. Combined with worsening labor shortages, this means that the operating environment remains challenging for domestic-demand service industries, the company’s principal customers.」

「Although employment conditions have improved, real wages have remained sluggish. Household survey data from the Statistics Bureau of the Ministry of Internal Affairs and Communications show that real consumption by households of 2 or more persons has alternated between year-on-year increases and decreases from month to month, indicating a lack of clear direction. Meanwhile, improving employment conditions have led to worsening labor shortages, and the operating environment remains challenging for domestic-demand service industries, the company’s principal customers.」