Risk of Declining Customer Traffic and Store Closures Due to COVID-19

「If a major natural disaster such as an earthquake, typhoon, or flood occurs, or if an unknown infectious disease becomes widespread, possible effects include damage to store facilities, suspension of food supplies due to supply-chain disruptions, requests from administrative authorities to voluntarily suspend operations, and loss of opportunities for consumers to go out.」

「If a novel infectious disease or other illness becomes widespread around the world, making it difficult for stores in the relevant areas to operate, or if the economy slows significantly due to a decline in personal consumption and disruptions to production and logistics functions, the Company's business performance may be affected.」

「Following the reclassification of COVID-19 as a Category 5 disease, customer traffic showed a pronounced recovery, and sales recovered to a level approaching that before the pandemic.」

「Following the reclassification of COVID-19 under the Infectious Diseases Control Law from Category 2 to Category 5, restrictions on activities were eased and overall demand for dining out, which had declined during the pandemic, increased. Signs of a gradual recovery have begun to emerge.」

「As the government's classification of COVID-19 was shifted to Category 5 under the Infectious Diseases Control Law, restrictions on people's activities were eased and signs of a gradual recovery toward pre-pandemic levels emerged.」

「From the beginning of the fiscal year through mid-second quarter, a marked increase in the number of customers staying away from stores was observed due to the sharp rise in infections during the seventh and eighth waves of COVID-19. During the third-quarter accounting period, the gradual increase in customer visits became more pronounced and sales began to recover. However, losses incurred during the downturn caused by the increase in infections have not been reduced, and events or conditions that raise substantial doubt about the Company's ability to continue as a going concern remain in place.」

「During the current fiscal year, our company has faced significant temporary fluctuations in customer usage due to the substantial increase in infections during the seventh and eighth waves of COVID-19. Although net sales have shown signs of recovery as infections declined and customer visits gradually increased, losses incurred during the period of weakness caused by rising infections have not been improved, and events or conditions that raise substantial doubt about the appropriateness of the going concern assumption continue to exist.」

「A substantial increase in COVID-19 infections during the seventh wave temporarily caused restaurant usage nationwide to fall sharply.」

「The explosive increase in infections during the latest seventh wave caused customer visits, which had temporarily recovered, to decline again, and net sales remained in a very difficult situation.」

「During the third quarter of the current consolidated fiscal year, the sixth wave of variant infections that began to spread toward the end of the previous year led to requests under priority preventive measures to reduce operating hours and the hours for serving alcoholic beverages, and the company temporarily closed all but some stores.」

「Consumer sentiment toward dining out had initially begun to recover as infections declined. However, the sixth wave of infections from variants that began to spread toward year-end led to requests under priority preventive measures to reduce restaurant operating hours and the hours for serving alcoholic beverages, and a further decline in customer visits and net sales is expected. Changes in customers' dining patterns have also continued, resulting in lower customer visits and net sales because of weaker demand for dining at restaurants.」

「Progress in COVID-19 vaccination and other factors have begun to indicate that the disease is moving toward containment. However, if infections rise markedly again toward winter and the government or local authorities request that restaurants reduce their operating hours, the operating results of our group may be affected.」

「If the government or administrative authorities issue requests to refrain from going out, reduce operating hours, or temporarily close stores to prevent the spread of COVID-19, or if consumer sentiment toward dining out remains weak, customer visits may decline and affect the operating results of our group.」

「In light of the increase in infections from COVID-19 variants and the status of vaccination against COVID-19, requests from the government and local authorities affecting the food-service industry, including requests to close temporarily, reduce operating hours, refrain from serving alcoholic beverages, and hold meals in small groups, are expected to continue until a trend toward containment of the disease can be confirmed.」

「In response to the declaration of a state of emergency to prevent the spread of COVID-19, our group decided to temporarily close all stores from 8 January 2021. In addition, following the government's extension of the state of emergency, the temporary closure of all stores has been extended for the time being.」

「The number of effectively available seats has declined as a result of operating in accordance with infection-prevention guidelines. Changes in customers' dining patterns associated with new lifestyles, including a continuing trend toward smaller groups of visiting customers, may also affect the operating results of our group.」

「The company recorded an operating loss of ¥326.643 million, an ordinary loss of ¥295.827 million, and a net loss attributable to owners of the parent of ¥628.051 million, partly as a result of the temporary closure of all stores in response to the state of emergency declared by the Japanese government and requests from local governments to refrain from going out to prevent the spread of COVID-19.」

「The COVID-19 pandemic may affect the operating results and financial condition of our group through a significant decline in customer visits, suspension of store operations, reduced operating hours, and restrictions on the hours during which alcoholic beverages may be served, resulting from requests such as calls to refrain from going out under government measures to prevent the spread of infection.」