Market Environment Risk from Population Decline, Market Maturation and Intensifying Competition

「Meanwhile, in addition to the impact of U.S. trade and foreign policy, the outlook remains uncertain due to rising geopolitical risks, worsening Japan-China relations, and fluctuations in foreign exchange rates and interest rates.」

「However, concerns remain that future policies of the new U.S. administration and geopolitical risks could slow the global economy, and the outlook remains unstable.」

「Demand for dining out remained firm, supported by a recovery in foot traffic and growth in inbound consumption. At the same time, the challenging operating environment continues due to persistently high raw material prices against a backdrop of a structurally weak yen and the effects of chronic labor shortages.」

「Although the food-service industry was affected to some extent by the seventh and eighth waves of COVID-19, operating restrictions were lifted after activity restrictions were removed, and the recovery trend strengthened with support from government and local-authority measures to promote economic activity and inbound consumption. At the same time, the challenging operating environment continues as various costs, including raw material, logistics and labor costs, rise.」

「During the cumulative third quarter under review, domestic consumption remained sluggish due to soaring raw material and energy prices and the continued weakening of the yen. Easing restrictions on activities is expected to support a recovery in personal consumption. However, the prolonged situation in Ukraine and rising prices are spreading across a range of areas, and the outlook is expected to remain uncertain.」

「The food-service industry was intermittently affected by the seventh and eighth waves of COVID-19, resulting in a decline in customer traffic. In addition to soaring procurement prices for food materials, utility costs and labor costs, lifestyle changes during the COVID-19 pandemic reduced demand for large-group banquets and nighttime visits, and the challenging operating environment continues.」

「During the cumulative first quarter under review, Japan's economy remained sluggish as domestic consumption was affected by the continuing impact of COVID-19, soaring energy prices following Russia's invasion of Ukraine and the historically weak yen. The launch of the nationwide travel support program in October is expected to support a recovery in personal consumption. However, concerns about the spread of infection and rising prices are expanding across a range of areas, and the outlook is expected to remain uncertain.」

「The environment surrounding the food-service industry remains challenging as the market trends toward contraction amid population decline and the declining birthrate and aging population. The impact of the spread of COVID-19 has still not been contained. In addition, alongside price increases caused by the weaker yen, rising food material prices and energy costs are a concern.」

「The food-service industry continued to face challenging conditions amid restrictions imposed by the government and local authorities, including shortened operating hours and bans on serving alcoholic beverages. Even after the restrictions were lifted, the tendency to refrain from large-group banquets continued, and customer traffic remained sluggish. Lifestyle changes during the COVID-19 pandemic have also accelerated the shift from dining out to intermediate and home-prepared meals, and the outlook remains uncertain.」

「During the cumulative second quarter under review, Japan's economy was expected to resume economic activity after the declaration of a state of emergency and priority preventive measures associated with the spread of COVID-19 were lifted in October 2021. However, the sixth wave caused by a new variant led to the reintroduction of priority preventive measures in January 2022, and consumer activity remained sluggish. In addition, the outlook is expected to remain uncertain because of a combination of factors, including soaring crude oil and natural gas prices, supply chain disruptions and geopolitical risks.」

「The lifting in October of the declaration of a state of emergency and priority preventive measures, together with progress in vaccination, is expected to support the resumption of economic activity. However, concerns about a sixth wave and soaring crude oil and natural gas prices mean that the outlook is expected to remain uncertain. In the food-service industry, customer traffic remained sluggish due to requests from the government and local authorities to shorten operating hours and prohibit the serving of alcoholic beverages, as well as the effects of prolonged rainy weather nationwide. Lifestyle changes during the COVID-19 pandemic have also accelerated the shift from dining out to intermediate and home-prepared meals, and the outlook remains uncertain.」

「The food-service industry continues to face challenging conditions, as the government and local authorities have requested that people refrain from going out and that businesses shorten their operating hours in connection with declarations of a state of emergency and other measures, causing demand for dining out to fall sharply. In addition, while demand for takeout and delivery is increasing, many industry peers have entered these markets, raising concerns about intensifying competition. The outlook remains uncertain.」

「The spread of the third wave led to requests in some regions to shorten operating hours, causing demand for dining out to fall sharply. Conditions therefore remain challenging. In addition, while demand for takeout and delivery is increasing, many industry peers have entered these markets, raising concerns about intensifying competition. The outlook remains uncertain.」

「Although sales in the food-service industry have gradually shown signs of recovery, conditions remain challenging due to the decline in large-group dining and banquets and the reduction in seating capacity to ensure social distancing. In addition, while demand for takeout and delivery is increasing, many industry peers have entered these markets, raising concerns about intensifying competition. The outlook therefore remains uncertain.」

「The environment surrounding the food-service industry remains challenging as the market is shrinking amid population decline and the declining birthrate and aging population. The global spread of COVID-19 has also dealt a serious blow to the domestic economy, and a considerable amount of time is expected to be required for the economy to recover. In addition, the impact of COVID-19 continues to spread, and there is currently no clear prospect of its containment.」

「In addition, the consumption tax increase dampened consumer sentiment, while requests from the government and local authorities to refrain from going out to prevent the spread of COVID-19 forced stores to shorten their operating hours or close temporarily. The operating environment is therefore extremely challenging and critical.」

「The food-service industry continued to face a challenging operating environment due to rising labor and logistics costs, soaring raw material prices and the effects of a series of natural disasters. There were also concerns that the consumption tax increase would dampen consumer sentiment and that the spread of COVID-19 would have an impact. The outlook therefore remained uncertain.」

「There are also concerns that the consumption tax increase will dampen consumer sentiment and intensify competition with the intermediate food sector, including takeout, delivery and home delivery services to which the reduced tax rate applies. The outlook therefore remains uncertain.」

「Although the food-service industry is unlikely to see market expansion because of population decline and the declining birthrate and aging population, it has become a mature market. Customer preferences and needs are becoming increasingly diverse, while selection of products and services is becoming more stringent. In addition, intensifying competition among companies and stores has created a challenging operating environment.」