Decline in the domestic consumer market due to the declining birthrate and aging population, and diversification of consumer needs

「During the interim consolidated accounting period, Japan’s economy continued to see improvements in employment and income, but personal consumption remained weak as rising prices, including higher prices for food and daily necessities, continued to reduce consumers’ real purchasing power and further strengthen their propensity to economize.」

「During the fiscal year, the Japanese economy saw signs of recovery and increased inbound demand as employment and income conditions improved. However, continued high energy and raw material prices, driven in part by the ongoing trend of yen depreciation, resulted in continued price increases, and consumers remained focused on saving. The outlook also remained uncertain amid concerns about a prolonged slowdown in the Chinese economy and potential policy shifts by the United States.」

「During the interim consolidated accounting period, the Japanese economy remained uncertain despite improvements in employment and income conditions, as rising prices driven by yen depreciation and other factors kept consumers highly focused on saving. The distribution industry in which the group operates also continued to face a challenging business environment due to rising costs, including raw materials, logistics, and labor costs, as well as heightened concern about protecting household finances amid higher electricity bills and prices for daily necessities.」

「During the nine-month cumulative consolidated period under review, there were no new business or other risks, and no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the cumulative second quarter, economic activity was progressing toward normalization following the reclassification of COVID-19 to Category 5. However, consumers remained highly focused on protecting household finances amid persistently high energy prices and successive price increases, and uncertainty about the outlook continued.」

「During the cumulative first quarter, the classification of COVID-19 under Japan's infectious disease legislation was revised in May 2023, and economic activity was moving toward normalization. However, continued price increases for food and daily necessities have increased the burden on household finances, and uncertainty about the outlook for consumption continues.」

「Electricity and gasoline prices have continued to rise as a result of higher energy prices, and food and daily necessities have become more expensive. The domestic consumer market remains difficult amid anxiety about future living standards due to the burden on household finances.」

「During the cumulative third quarter, demand recovered in industries such as travel and dining out as COVID-19 activity restrictions were eased and travel support measures were introduced. However, electricity and gasoline prices rose due to higher energy prices, and food and daily necessities became more expensive, creating anxiety about future living standards due to the burden on household finances. The domestic consumer market therefore remained difficult.」

「Meanwhile, the domestic consumer market remains difficult as rapid yen depreciation and higher energy prices have led to price increases for food and daily necessities, creating anxiety about future living standards due to the burden on household finances.」

「During the cumulative first quarter, the Japanese economy saw signs of a recovery in consumption following the full lifting of priority preventive measures to prevent the spread of COVID-19. However, the domestic consumer market remained difficult due to prolonged geopolitical instability, rising prices of raw materials and other inputs, and the effects of yen depreciation.」

「Domestic personal consumption also remains in a difficult situation amid concerns about future exchange rates and rising prices.」

「During the cumulative second quarter, although domestic COVID-19 vaccinations had progressed, the spread of the fifth wave, centered on variant strains, led to the reissuance of the state of emergency from July through the end of September. In addition, unseasonably long rainfall in August affected conditions, and the consumer environment remained difficult.」

「In July 2021, Tokyo's fourth state of emergency was declared, and the Tokyo Olympics opened without spectators. With people being asked to refrain from going out, there were no signs of a recovery in domestic consumer sentiment, and the outlook remained uncertain.」

「Regarding the business environment surrounding the group, although COVID-19 vaccinations have begun, the spread of variant strains is expanding, and the outlook is expected to remain uncertain.」

「During the cumulative third quarter, following the lifting of the state of emergency declared in response to COVID-19, social and economic activity gradually resumed with infection-prevention measures in place. However, the recovery remained sluggish and extremely difficult conditions continued. The renewed spread of infections during the winter again restricted economic activity, further increasing uncertainty about the outlook.」

「In the distribution industry in which the group operates, the significant changes in consumer trends described above have made the uncertain outlook even more pronounced, resulting in an increasingly challenging business environment.」

「In the distribution industry in which the group operates, difficult conditions continue due to stronger thrift preferences following the consumption tax increase implemented in October 2019, as well as the spread of COVID-19 infections and requests to refrain from going out to prevent its spread.」

「Sales of winter appliances such as humidifiers struggled at stores due in part to the mild winter, resulting in sales slightly below the same period of the previous year.」

「In addition to a slowdown in the summer product season due to unseasonable weather, concerns remain about the effects of the consumption tax increase and the impact of higher tariffs on prices.」

「In the toy-related business, sales of marine goods such as floats and beach sandals struggled, partly because temperatures rose later than usual ahead of summer, resulting in sales below the same period of the previous year.」

「During the cumulative second quarter, sales were affected by a series of natural disasters, including major earthquakes and typhoons and record-breaking torrential rain, as well as a cooling in consumer sentiment.」

「In the distribution industry in which the group operates, difficult conditions continue due to intensifying sales competition across industries and business formats as companies seek differentiation, as well as rising logistics costs.」

「During the fiscal year, the Japanese economy was on a moderate recovery trend, with improvements in corporate earnings and employment conditions. However, the recovery in domestic personal consumption remained limited due to sluggish wage growth and higher burdens resulting from changes to the social security system, while thrift preferences and selective consumption for lifestyle-related products continued.」

「During the cumulative third quarter, the Japanese economy was on a moderate recovery trend, with improvements in corporate earnings and employment conditions. However, sluggish wage growth has kept thrift preferences and selective consumption for lifestyle-related products in place, while sales competition across industries and business formats has intensified as companies seek differentiation, and difficult conditions continue in the distribution industry in which the group operates.」

「Domestic personal consumption continues to reflect thrift preferences and selective consumption for lifestyle-related products. In the distribution industry in which the group operates, sales competition across industries and business formats is intensifying as companies seek differentiation, and difficult conditions continue.」

「During the cumulative first quarter, the Japanese economy remained on a moderate recovery trend due to improvements in employment conditions and the effects of government economic measures, and personal consumption showed signs of recovery. However, concerns about the impact of the new US administration on the Japanese economy and instability on the Korean Peninsula kept the economic outlook uncertain. Domestic personal consumption continued to reflect thrift preferences and selective consumption for lifestyle-related products.」

「In the distribution industry in which the group operates, consumption declined due to unseasonable weather, including a delayed end to the rainy season, repeated typhoons, and a mild winter. The effects of retail-sector reorganization and integration have also made the outlook extremely difficult to predict.」

「In the distribution industry in which the group operates, consumption has declined amid the effects of retail-sector reorganization and integration, delayed end of the rainy season, and repeated typhoons. Consumers also remain cautious about purchasing lifestyle-related products amid the recent deflationary trend, while thrift preferences and selective consumption continue.」

「During the cumulative second quarter, the Japanese economy continued to experience sluggish personal consumption due to the appreciation of the yen and weak stock markets. The outlook remained uncertain amid the US presidential election, expectations of a year-end interest-rate hike, and concerns about an economic slowdown in China and other emerging markets. The distribution industry also faced difficult conditions as consumption declined amid continued thrift and low-price preferences.」

「Consumers remain cautious about purchasing lifestyle-related products, and the polarization between thrift and low-price preferences and selective consumption continues. The business environment surrounding the group also remains challenging due to industry consolidation and intensifying competition across business formats.」

「In addition to the shrinking domestic consumer market and increasingly diverse consumer needs resulting from the declining birthrate and aging population in recent years, the consumer environment is expected to change significantly further due to the effects of exchange rates and rapid changes in domestic and overseas economic conditions.」