Intensifying competition, labor shortages, and rising store costs

「The operating environment remained challenging due to continued increases in personnel costs, logistics costs and energy unit prices.」

「The retail industry continues to face a difficult operating environment due to market contraction resulting from population decline, the declining birthrate and an aging population, intensifying competition across business formats, and rising costs including personnel expenses. Consumer spending patterns have also changed as households have become more budget-conscious.」

「Selling, general and administrative expenses exceeded the year-earlier period due to the impact of cost increases, including proactive wage increases, growth investments such as renovations of existing stores, and surging logistics costs.」

「The environment surrounding the retail industry also remains difficult due to market contraction caused by population decline and declining birth rates combined with an aging population, intensifying competition across business formats, the impact on personal consumption of a stronger desire to protect household finances, and rising costs including labor costs.」

「(Selling, general and administrative expenses up 6.0% year on year; personnel expenses up 8.1%; utilities expenses down 21.5%.)」

「Difficult conditions are expected to continue, including persistent inflationary pressure, higher logistics costs resulting from the 2024 logistics problem, cost increases from wage hikes and other factors, and the risk of sluggish personal consumption as households become even more inclined to economize.」

「During the cumulative third quarter of the fiscal year, operating revenue remained solid and increased. While viewing the rise in personnel expenses resulting from wage increases as an active investment in the future, we worked to improve productivity through the use of process centers and the promotion of digitalization. Selling, general and administrative expenses increased by ¥2,994 million year on year, but operating profit increased as a result of higher operating revenue.」

「While gross profit supported by higher sales remained solid, expenses were affected by rising costs across the board, including utility expenses, particularly electricity charges. We worked actively company-wide to reduce electricity consumption and cut expenses such as office supplies and consumables. We also raised wages to address rising prices and improve employee motivation, while pursuing greater operating efficiency through digitalization, productivity gains through labor-saving measures, and cost control. Nevertheless, selling, general and administrative expenses exceeded the previous year (selling, general and administrative expenses up 4.3% year on year; personnel expenses up 4.9%; company-wide electricity consumption down 9.1%; electricity charges up 2.3%).」

「All costs remained elevated during the fiscal year. Utility expenses, particularly electricity charges, exceeded the previous year, and although we worked company-wide to reduce electricity consumption and lower unit prices through contract changes, selling, general and administrative expenses still exceeded the previous year (selling, general and administrative expenses up 5.8% year on year; personnel expenses up 5.0%; company-wide electricity consumption down 8.2%; electricity charges up 27.2%).」

「In addition to lower gross profit margins due to higher purchase and raw material prices, rising costs across the board reduced profit. Electricity charges, in particular, increased by approximately ¥6.9 billion across the Group from the previous year. Although we worked to reduce costs actively, including selling expenses and capital activity expenses, alongside thorough power conservation, and to improve gross profit margins by reducing waste, these efforts were insufficient to absorb the increase in utility expenses.」

「While all costs continued to rise, utility expenses, particularly electricity charges, remained sharply higher. We worked company-wide to reduce electricity consumption, improve productivity through more efficient and labor-saving operations, and review advertising expenses, but selling, general and administrative expenses exceeded the previous year (selling, general and administrative expenses up 6.6% year on year; electricity charges up 52.6%).」

「We face new challenges, including responding promptly to changing demand, such as declining demand for at-home meals and stay-at-home consumption, and higher costs resulting from rising raw material prices and utility expenses.」

「Costs are expected to rise due to higher energy resource prices, particularly crude oil, and soaring food prices resulting from worldwide adverse weather conditions and increased demand.」

「In addition to customers avoiding crowding and long stays in stores due to COVID-19, the cancellation of various events and other factors affected visitor traffic to large stores, resulting in lower sales. (Apparel sales down 18.7% year on year; tenant sales down 11.1%.)」

「Although directly operated apparel stores and tenants, mainly apparel and food-service businesses, showed signs of recovery in the third quarter (September-November), sales declined because customers avoided crowding and long stays in stores due to COVID-19, while the cancellation of various events and other factors significantly affected visitor traffic to large stores. (Apparel sales down 19.6% year on year; tenant sales down 12.1%.)」

「Although a temporary recovery in performance was seen in June, there was no significant change in consumption trends themselves. Consolidated operating revenue declined because the substantial revenue decline at subsidiaries facing reduced demand due to COVID-19 and the revenue decline at large shopping centers could not be offset.」

「However, the Group posted a significant negative impact, as it was unable to offset the substantial revenue declines in industries facing reduced demand due to COVID-19 or the revenue decline caused by lower visitor numbers at large shopping centers.」

「The spread of the novel coronavirus disease is expected to cause worldwide production stoppages and travel restrictions, significantly affecting the domestic economy. Commercial facilities, restaurants and other businesses have already seen closures and reduced operating hours spread, while corporate earnings are expected to decline and capital investment to stagnate, and economic activity is expected to take time to return to normal.」

「The retail industry continues to face a difficult operating environment due to intensifying competition across industries and business formats, market contraction caused by population aging and decline, an entrenched preference for saving due to stagnant real wage growth and concerns about the future, and the impact of an increase in the consumption tax rate.」

「The retail industry continues to face a difficult operating environment due to intensifying competition across industries and business formats, market contraction caused by population aging and decline, an entrenched preference for saving due to stagnant real wage growth and concerns about the future, and the anticipated costs associated with an increase in the consumption tax rate and resulting weakness in consumer sentiment.」

「The retail industry continues to face a difficult operating environment due to intensifying competition across industries and business formats, market contraction caused by population aging and decline, an entrenched preference for saving due to stagnant real wage growth, and the planned increase in the consumption tax rate.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, market contraction caused by population aging and decline, rising costs including logistics and construction materials, and labor shortages caused by difficulties in hiring.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, market contraction caused by population aging and decline, rising costs including logistics and construction materials, and labor shortages caused by difficulties in hiring.」

「However, we expect the operating environment surrounding the business to remain difficult due to market contraction caused by the declining birthrate, population decline and aging population, intensifying sales competition across industries and business formats, price increases for products and services resulting from soaring raw material prices and labor shortages, and heightened household budget-consciousness caused by concerns over tax increases and social security.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, labor shortages caused by difficulties in hiring, rising costs associated with store openings and renovations, and increases in electricity rates.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, labor shortages caused by difficulties in hiring, rising costs associated with store openings and renovations, and increases in electricity rates.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, labor shortages caused by difficulties in hiring, and rising costs associated with store openings and renovations.」

「In Japan, the market is expected to continue shrinking due to declining birth rates, an aging population and population decline. The operating environment is also expected to remain difficult due to price increases for goods and services caused by labor shortages and a growing desire to protect household finances amid concerns about tax increases and social security.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, labor shortages caused by difficulties in hiring, and rising costs associated with store openings and renovations.」

「In the retail industry, the operating environment remains difficult due to intensifying competition across industries and business formats, labor shortages caused by difficulties in hiring, and rising costs associated with store openings and renovations.」

「The operating environment remains difficult due to intensifying competition across industries and business formats, labor shortages caused by difficulties in hiring, and rising costs associated with store openings and renovations.」