A Mature Cosmetics Market and Intensifying Competition from New Entrants and Similar Products

「However, in addition to higher labor and logistics costs, labor shortages became increasingly severe, making the operating environment particularly challenging for small and midsize companies. Against a backdrop of a weaker yen and higher share prices, the retail and travel industries benefited from strong inbound demand and sales of high-priced products, but real wages remained sluggish because of rising prices, and consumer sentiment generally remained subdued.」

「Consumer sentiment also recovered, and the restaurant and travel-related industries, which had languished during the COVID-19 pandemic, expanded. However, successive price increases, including for food products, made consumers even more selective in their purchasing behavior.」

「Japan’s cosmetics market, in which the Company’s principal businesses operate, is already mature, and industry shipments are said to have remained broadly flat in recent years. In response to growing preferences for natural and health-oriented products, the Company has developed and provided its own natural-oriented cosmetics and health foods, including supplements. However, new entrants are also increasing in these fields.」

「As consumer sentiment generally weakened, consumers became even more selective in their purchasing behavior.」

「Japan’s cosmetics market, in which the Company’s principal businesses operate, is already mature, and industry shipments are said to have remained broadly flat in recent years. In response to growing preferences for natural and health-oriented products, the Company has developed and provided its own natural-oriented cosmetics and health foods, including supplements. However, new entrants are also increasing in these fields.」

「In the retail industry, department stores and other retailers fell below even the year-earlier level, which had been affected by the consumption tax increase, because of requests to refrain from going out and the collapse in inbound demand.」

「In the retail industry, most department stores and specialty stores closed after receiving requests to suspend operations in response to the government’s declaration of a state of emergency, creating an extremely challenging operating environment. In contrast, e-commerce operators and physical retailers such as drugstores and supermarkets handling food products expanded, resulting in increasing polarization.」

「Japan’s cosmetics market, in which the Company’s principal businesses operate, is already mature, and industry shipments are said to have remained broadly flat in recent years. In response to growing preferences for natural and health-oriented products, the Company has developed and provided its own natural-oriented cosmetics and health foods, including supplements. However, new entrants are also increasing in these fields.」

「During the cumulative third-quarter period, the domestic economy showed increasing signs of a slowdown in the global economy against a backdrop of trade and geopolitical issues, while concern grew over deteriorating business sentiment in Japan, particularly in export-oriented manufacturing. In the retail industry, after October, sales of high-priced goods, apparel and daily necessities fell sharply because of the decline in demand following the pull-forward in demand before the consumption tax increase. Although sales subsequently showed signs of recovery, the impact continued because of weak consumer sentiment. In addition, Typhoon No. 19 forced stores, mainly in the Tokyo metropolitan area, to close or shorten their operating hours, while unseasonably warm weather and other adverse weather conditions also contributed to an overall difficult business environment.」

「While some front-loaded demand related to the consumption tax increase was seen in the retail industry, successive natural disasters and unfavorable weather affected corporate performance. Rising costs, including labor costs, also made the operating environment increasingly challenging.」

「As personal consumption began to recover with improvements in employment and income conditions, the retail industry faced increasingly acute labor shortages at physical stores. In addition to higher labor and other expenses, competition with mail-order and other operators intensified, making the operating environment generally more challenging.」

「Although consumer sentiment, which had weakened because of a succession of natural disasters and other factors, was beginning to recover, profitability conditions in the retail industry became increasingly difficult because of labor shortages and soaring labor costs. Competition within the industry, including with online retailers, also intensified, resulting in an increasingly pronounced divergence between winners and losers.」

「As value-oriented businesses targeting consumers’ preference for frugality and online retailers expanded, the operating environment for traditional retailers, including department stores and major mass retailers, became increasingly challenging.」

「Meanwhile, competition in the retail industry has intensified across traditional industry boundaries, led by expanding e-commerce operators. In addition to higher raw-material prices and labor costs, consumers’ persistent preference for frugality has kept the earnings environment generally challenging.」

「Japan’s cosmetics market, in which the Company’s principal businesses operate, is already mature, and industry shipments are said to have remained broadly flat in recent years. In response to growing preferences for natural and health-oriented products, the Company has developed and provided its own natural-oriented cosmetics and health foods, including supplements. However, new entrants are also increasing in these fields.」

「Japan’s cosmetics market, in which the Company’s principal businesses operate, is already mature, and industry shipments are said to have remained broadly flat in recent years. In response to growing preferences for natural and health-oriented products, the Company has developed and provided its own natural-oriented cosmetics and health foods, including supplements. However, new entrants are also increasing in these fields.」