A challenging business environment driven by foreign exchange rates, fuel prices and labor shortages

「In addition to soaring energy costs and raw-material prices caused by prolonged geopolitical risks and the unstable trend in foreign exchange rates, the occurrence of successive natural disasters across Japan and the increased burden on household finances resulting from continuing price increases」

「At the same time, in addition to higher energy costs and raw material prices associated with prolonged geopolitical risks and continued volatility in foreign exchange markets, the occurrence of successive natural disasters across Japan and the increased burden on household finances from ongoing inflation have further strengthened consumers’ preference for saving and defensive purchasing behavior.」

「Profit margins fell below expectations due to soaring raw material prices and the impact of foreign exchange movements.」

「Although personnel expenses, energy prices and other costs are expected to continue rising, these increases have already been incorporated into the initial plan, and we will continue working to improve operational efficiency and reduce expenses.」

「Meanwhile, uncertainty in the international community has increased further due to shifts in the trade policies of major countries, the introduction of new tariff measures, and the prolonged nature of geopolitical risks. Foreign exchange volatility and elevated resource prices resulting from these factors have driven up raw material and energy costs, and the outlook for the economy remains uncertain.」

「During the interim consolidated accounting period (21 February 2025 to 20 August 2025), the environment surrounding the Company was on a gradual recovery trend due to improvements in corporate earnings and employment and income conditions. However, the impact of U.S. tariff policies and geopolitical risks related to the situation in Ukraine and the Middle East persisted, and the outlook remained uncertain due to higher raw material and energy costs resulting from surging resource prices.」

「Meanwhile, geopolitical risks, including the situation in Ukraine and the Middle East, persisted, and the outlook remained uncertain due to rising raw material and energy costs accompanying surging resource prices and the yen's rapid depreciation.」

「During the first quarter consolidated cumulative period (21 February 2024 to 20 May 2024), the environment surrounding the Company was gradually returning to normal as various policies took effect, including through accelerating wage growth against a backdrop of worsening labor shortages and improvements in employment and income conditions. However, the outlook remained uncertain due to declining real wages resulting from higher prices associated with surging resource prices and the rapid depreciation of the yen amid heightened geopolitical risks, including the prolonged situation in Ukraine and the Middle East, as well as rising energy costs.」

「Meanwhile, costs including raw material prices and labor costs remained elevated due to the prolonged Russia-Ukraine situation, escalating tensions in the Middle East, and the prolonged depreciation of the yen, leaving the outlook uncertain.」

「During the third quarter consolidated cumulative period (21 February 2023 to 20 November 2023), the environment surrounding the Company was gradually becoming one in which the impact of COVID-19 was subsiding and the recovery of foot traffic and domestic consumption was expected as domestic restrictions on activities and restrictions on entry from overseas were eased. However, the outlook for the global economy remained uncertain due to factors including the prolonged tensions between Russia and Ukraine, persistent inflation in various countries accompanying shifts in monetary policy, and turmoil in the financial sectors of Europe and the United States.」

「During the second quarter consolidated cumulative period (21 February 2023 to 20 August 2023), the environment surrounding the Company was gradually becoming one in which the impact of COVID-19 was subsiding and the recovery of foot traffic and domestic consumption was expected as domestic restrictions on activities and restrictions on entry from overseas were eased. However, the outlook for the global economy remained uncertain due to factors including the prolonged tensions between Russia and Ukraine, persistent inflation in various countries accompanying shifts in monetary policy, and turmoil in the financial sectors of Europe and the United States.」

「During the first quarter consolidated cumulative period (21 February 2023 to 20 May 2023), the environment surrounding the Company was gradually becoming one in which the impact of COVID-19 was subsiding and the recovery of foot traffic and domestic consumption was expected as domestic restrictions on activities and restrictions on entry from overseas were eased. However, the outlook for the global economy remained uncertain due to factors including the prolonged tensions between Russia and Ukraine, persistently high inflation in various countries accompanying shifts in monetary policy, and turmoil in the financial sectors of Europe and the United States.」

「During the consolidated fiscal year under review, Japan's economy remained uncertain, as rising raw material and energy prices triggered by the emergence of geopolitical risks, including the prolonged situation in Ukraine, and the impact of economic slowdowns caused by measures taken by countries to combat high inflation offset progress toward balancing measures against COVID-19 with economic activity.」

「Japan’s economy during the cumulative third quarter (21 February 2022 to 20 November 2022) showed signs of recovery as measures to prevent the spread of the novel coronavirus disease, including vaccinations, were balanced with social and economic activity. However, infections had not yet been brought under control, partly due to a renewed increase in cases caused by new variants. The outlook remained uncertain amid surging prices for energy resources such as crude oil and raw materials due to worsening international conditions and a rapid depreciation of the yen.」

「Japan’s economy during the cumulative second quarter (21 February 2022 to 20 August 2022) showed signs of recovery as measures to prevent the spread of the novel coronavirus disease, including vaccinations, were balanced with social and economic activity. However, infections had not yet been brought under control, partly due to a renewed increase in cases caused by new variants. The outlook remained uncertain amid surging prices for energy resources such as crude oil and raw materials due to worsening international conditions and a rapid depreciation of the yen.」

「Japan’s economy during the cumulative first quarter (21 February 2022 to 20 May 2022) remained in an extremely challenging position as the impact of the novel coronavirus disease continued for an extended period. The business activities and personal consumption remained extremely weak after priority preventive measures reintroduced in January 2022 were extended through 21 March. Although the spread of vaccinations brought signs of efforts to prevent infections, reopen the economy and normalize activity, the outlook remained uncertain due to geopolitical risks, including Russia’s invasion of Ukraine, surging prices for energy resources such as crude oil and raw materials, and a rapid decline in the value of the yen driven by higher US interest rates. In the retail industry, costs continued to rise due to fluctuations in raw material prices amid supply-demand imbalances and price surges, higher energy costs, and higher labor costs, and the challenging operating environment continued.」

「Although a temporary recovery was seen as vaccinations progressed and the number of people infected with the disease declined, the rapid spread of new variants continued to have a significant impact. The outlook remained uncertain amid concerns over higher raw material prices and crude oil prices, with the latter driven mainly by increased geopolitical risks.」

「Japan’s economy during the cumulative third quarter (21 February 2021 to 20 November 2021) remained challenging due to the continuing impact of the novel coronavirus disease. As vaccinations progressed, infections began to ease and expectations grew for the normalization of economic activity. However, the prolonged spread of the disease continued to have a significant impact, and concerns over a renewed spread caused by new variants persisted, leaving the economic outlook uncertain.」

「Japan’s economy during the cumulative second quarter remained challenging due to the continuing impact of the novel coronavirus disease (hereinafter, the “disease”). Although progress in vaccinations brought a temporary recovery, the prolonged spread of the disease continued to have a significant impact. In some regions, states of emergency were declared intermittently and priority preventive measures were applied, while corporate earnings declined and employment conditions deteriorated, leaving the outlook uncertain.」

「The spread of the novel coronavirus may affect the financial condition and operating results of the Group, and we will continue to closely monitor developments.」

「The Group may be forced to respond to the spread of the novel coronavirus by temporarily closing stores or changing their operating hours. In the fiscal year ending February 2021, in addition to reduced operating hours at some stores, the Group continued operations by implementing in-store safety measures so that customers could visit with confidence, including requiring store employees to wear masks, thorough hygiene management through handwashing and alcohol disinfection, measures to avoid crowding, and installing transparent screens at checkouts and requiring checkout staff to wear gloves. However, depending on the future spread of the virus, further restrictions on operations and staff shortages affecting store operations could affect the Group’s operating results and financial condition.」

「The spread of the novel coronavirus may affect the financial condition and operating results of the Group, and we will continue to closely monitor developments.」

「Japan’s economy during the cumulative second quarter remained in an extremely challenging environment as the spread of the novel coronavirus severely restricted social and economic activity, causing corporate earnings and business sentiment to deteriorate, personal consumption to decline, and inbound demand to fall sharply. Even after the government lifted the state of emergency, the recovery in economic activity remained slow, and uncertainty about the outlook continued.」

「The spread of the novel coronavirus may affect the financial condition and operating results of the Group, and we will continue to closely monitor developments.」

「Japan’s economy during the fiscal year remained on a moderate recovery path as employment and income conditions improved, while corporate earnings remained at a high level. However, uncertainty about the outlook increased due to an unexpected increase in social anxiety caused by the spread of the novel coronavirus, in addition to the decline following the pull-forward in demand associated with the consumption tax increase. Overseas, uncertainty about the outlook remained due to the prolonged US-China trade dispute, uncertainty surrounding the situation in the Middle East, and the slowdown in the European economy.」

「Japan’s economy during the cumulative third quarter remained on a moderate recovery path as employment and income conditions continued to improve. However, the increase in consumption tax in October 2019 raised concerns over downside risks to the economy, including a decline following the pull-forward in demand and weakening corporate earnings. Overseas, the outlook remained uncertain due to concerns over the global economic impact of the prolonged US-China trade dispute and the slowdown in the Chinese and European economies.」

「Meanwhile, uncertainty in the global economy continues due to the US-China trade dispute and the UK’s withdrawal from the EU, among other factors. Risks that could weigh on economic activity remain, and the recovery in economic activity was not yet being felt.」

「In the retail industry, labor and logistics costs are rising due to tight labor supply and demand. Competition to attract customers across industries and business formats is also intensifying as consumer preferences diversify and consumers’ strong preference for saving persists, and the challenging operating environment continues.」

「Risks are also increasing, including concerns over further increases in labor and logistics costs due to medium- to long-term increases in raw material prices and tight labor supply and demand. The challenging operating environment is expected to continue.」

「Japan’s economy during the cumulative third quarter remained on a moderate expansion path as corporate earnings and employment conditions improved. However, the economic outlook remained uncertain due to uncertainty in overseas economies and the US-China trade dispute, and the recovery in economic activity was not yet being felt.」

「Japan’s economy during the cumulative second quarter remained on a moderate expansion path as corporate earnings and employment conditions improved. However, the economic outlook remained uncertain due to uncertainty in overseas economies, the impact of financial market volatility, and trade friction, and the recovery in economic activity was not yet being felt.」

「In the retail industry, the outlook for personal consumption remains uncertain, while competition across industries and business formats continues to intensify, making the environment increasingly challenging.」

「In the retail industry, competition among companies is becoming more intense as consumers’ preference for saving persists. In addition, concerns over medium- to long-term increases in raw material prices and labor costs due to labor shortages remain, and the challenging operating environment is expected to continue.」

「In the retail industry, consumers’ strong preference for saving and the increased burden from the expanded application of social insurance continue to support a high focus on protecting household finances. In addition, competition across industries and business formats has intensified, and the environment surrounding the industry remains challenging.」

「In the retail industry, competition across industries and business formats, as well as price competition with competing stores, continues to intensify. The environment is becoming even more challenging, and labor shortages have also become severe.」

「In the retail industry, competition across industries and business formats, as well as price competition with competing stores, continues to intensify. The environment is becoming even more challenging, and labor shortages have also become severe.」

「In the retail industry, the environment is becoming increasingly challenging as labor shortages caused by changes in the employment environment, intensifying competition across industries and business formats, surging food prices due to unfavorable weather, and consumers’ stronger focus on protecting their household finances continue to weigh on personal consumption.」

「During the third quarter accounting period, yen depreciation provided a tailwind for exports, but consumers’ focus on protecting their household finances strengthened due to surging food prices caused by unfavorable weather and the increased burden from the expanded application of social insurance, among other factors. Personal consumption remained sluggish, and the industry environment continued to become more challenging.」

「Personal consumption remains sluggish as labor shortages caused by changes in the employment environment, intensifying competition across industries and business formats, worsening export conditions due to yen appreciation, and consumers’ stronger focus on protecting their household finances in response to rising prices continue. The industry environment continues to become more challenging.」

「The business environment surrounding the industry continues to become more challenging, due to the shift from yen depreciation to yen appreciation, higher gasoline prices resulting from the rise in heavy fuel oil prices, further strengthening of consumers’ focus on protecting their household finances, labor shortages caused by difficulties in hiring, and intensifying competition across industries and business formats.」