Pressure on operating costs and the purchasing environment from inflation and yen depreciation
First written in FY2023-Q2. 9 of 12 entries say "Materialised", first in FY2023-Q3. Latest entry: FY2027-H1.
Axial Retailing moved to the "Worse" side of this theme in 2023, the same year as the typical company in this theme.
The whole theme swung hardest in 2025: 4 of 6 companies on the "Worse" side.
0 other companies' latest entry also says "Worsened".
- FY2027-H1WorsenedAnnual report
「Recently, procurement costs for raw materials and packaging materials have risen sharply due to turmoil in the Middle East and the prolonged depreciation of the yen. In addition, since the previous fiscal year, the group has been operating in an environment where competition with other companies has intensified rapidly.」
The company explicitly identified the sharp increase in procurement costs for raw materials and packaging materials caused by turmoil in the Middle East and the prolonged depreciation of the yen, together with intensifying competition, as management challenges. - FY2026WorsenedAnnual report
「In response to higher labor costs from proactive wage increases and higher miscellaneous expenses due to inflation, the company and its departments implemented various cross-functional measures to secure appropriate profit and reduce costs. As the increase in selling, general and administrative expenses was absorbed by higher gross profit, operating income increased by 1.0% year on year to ¥12,185 million.」
Although cost pressures from raw materials, materials, fuel, wage increases, social insurance contributions, delivery costs and payment processing fees continued throughout the year, operating profit reached a record high as a result of securing an appropriate level of profit and reducing costs. - FY2026-H1MaterialisedAnnual report
「Operating profit decreased from the same period of the previous year due to a slight decline in the gross profit margin resulting from a low-markup pricing policy based on higher raw material costs, competitor trends and the general direction of price increases, as well as higher personnel expenses from proactive wage increases and increased social insurance contributions.」
Higher raw material costs, a low-markup pricing policy reflecting competitor conditions, wage increases and higher social insurance contributions continued to pressure the gross profit margin and operating profit during the interim period. Delivery costs increased by ¥186 million and payment processing fees by ¥117 million. - FY2025MaterialisedAnnual report
「Operating profit decreased from the same period of the previous year due to a slight decline in the gross profit margin resulting from a low-markup pricing policy based on higher raw material costs, competitor trends and the general direction of price increases, as well as higher personnel expenses from proactive wage increases and increased social insurance contributions.」
Higher raw material costs, wage increases and social insurance contributions, together with a pricing policy that restrained the pass-through of higher costs, pressured the gross profit margin and operating profit from the interim period through the full year. - FY2025-H1MaterialisedAnnual report
「Operating profit decreased from the same period of the previous year due to a slight decline in the gross profit margin resulting from a low-markup pricing policy based on higher raw material costs, competitor trends and the general direction of price increases, as well as higher personnel expenses from proactive wage increases and increased social insurance contributions.」
Higher raw material costs, wage increases and social insurance contributions, together with a pricing policy that restrained the pass-through of higher costs, continued to pressure the gross profit margin and operating profit during the interim period. - FY2024MaterialisedAnnual report
「Utilities expenses decreased by ¥363 million from the same period of the previous year due to lower unit prices and the effects of energy-saving equipment and solar power generation, which the company has actively promoted in recent years. Repair expenses increased by ¥611 million from the same period of the previous year due to renovations to existing equipment associated with store remodeling, an increase in equipment failures caused by extreme heat, and repairs undertaken to improve future profitability.」
Although cost pressures from higher commodity and energy prices continued, savings in utilities expenses from energy-saving equipment and solar power generation were also reflected in the results. - FY2024-Q3MaterialisedAnnual report
「In addition to the higher frequency of visits, customers became more frugal due to soaring prices, and the number of items purchased decreased 2.2% year on year at existing stores and 2.4% across all stores.」
Inflation and consumers’ preference for saving were reflected in a decline in the number of items purchased. Meanwhile, sales price revisions increased the average price per item by 5.3% across all stores. - FY2024-Q2MaterialisedAnnual report
「Utilities expense increased ¥66 million from the same period of the previous year due to higher unit prices.」
The impact of higher commodity and energy prices was reflected in a ¥66 million year-on-year increase in utilities expenses. - FY2024-Q1MaterialisedAnnual report
「With inflation continuing to advance, the company has been unable to readily enter a phase of economic expansion.」
Persistently high inflation has affected operations through higher purchase prices for products and raw materials, sales price revisions, and increases in electricity charges and material costs. Although the average price per item at existing stores increased by 5.4% following the price revisions, the number of items purchased decreased by 2.2%. - FY2023MaterialisedAnnual report
「Utilities expense has been reduced through a review of contract terms and the introduction of energy-saving equipment, but increased ¥1,547 million from the same period of the previous year due to the impact of significant electricity rate increases.」
The impact of higher commodity and energy prices was reflected in a ¥1,547 million year-on-year increase in utilities expenses and a ¥201 million increase in delivery costs, among other factors. Cost-cutting measures and cost increases coexisted. - FY2023-Q3MaterialisedAnnual report
「Personnel expenses increased by ¥646 million from the same period of the previous year due to new hiring for 4 new stores and 1 replacement store, as well as regular pay increases and base-pay increases. Utilities expenses increased by ¥1,239 million from the same period of the previous year due to substantial price increases. Payment processing fees increased by ¥100 million from the same period of the previous year as cashless payments became more prevalent.」
The impact of rising prices for commodities and energy was reflected in a ¥1,239 million year-on-year increase in utilities expenses. Higher personnel expenses associated with new store openings and higher cashless payment processing fees also pushed up operating costs. - FY2023-Q2First statedAnnual report
「However, rising prices stemming from international conditions and environmental issues, together with the yen’s depreciation, are hindering an economic recovery. Profit from operations onward decreased from the same period of the previous year due to a slight decline in the gross profit margin resulting from the company’s restraint in passing higher costs on to sales prices, in consideration of the sharp increase in customers’ household burdens; substantial increases in electricity charges and various material costs; and costs associated with growth investments, including the opening of 2 new stores that had no counterpart in the same period of the previous year.」
The company explicitly identified inflation and yen depreciation as obstacles to an economic recovery. The resulting restraint on passing higher costs on to customers, as well as increases in electricity charges and material costs, has already affected profit.