Intensifying Competition and Rising Raw Material Prices and Labor Costs

「Meanwhile, soaring raw material prices and rising utility, logistics and construction costs are having a significant impact on the operating environment. In addition, we recognize changes in the supply-demand balance in the labor market as a key management issue for business continuity, and the environment surrounding the business remains challenging.」

「In the food-service industry, the recovery trend has continued, supported by increased foot traffic as economic activity normalizes and an increase in inbound demand. However, we face a challenging operating environment due to soaring raw material prices, particularly for rice, as well as higher labor costs resulting from increases in the minimum wage and base-pay increases.」

「However, in addition to rising raw material prices and labor costs, we face a challenging operating environment as continued inflation is heightening consumers' inclination to economize.」

「Regarding costs, support from the government's measures to ease the burden of utility costs enabled us to appropriately manage the increase in variable expenses resulting from higher revenue. Meanwhile, the outlook remains uncertain due to expected increases in utility and logistics costs and continued increases in raw material costs, and we continue to work to reduce food waste and maintain appropriate expense controls.」

「Although we were affected by higher raw material and utility costs, support from the government's measures to ease the burden of utility costs enabled us to appropriately manage the increase in variable expenses resulting from higher revenue. Meanwhile, the outlook remains uncertain due to expected increases in utility costs from autumn onward and continued increases in raw material costs, and we continue to work to reduce food waste and maintain appropriate expense controls.」

「Although we received support under the government's measures to ease the burden of utility costs, raw material and utility costs continued to rise and the outlook remained uncertain. We continue to work to reduce food waste and maintain appropriate expense controls.」

「Regarding costs, although we continue to work to reduce food waste and strengthen expense controls, we were affected by soaring prices for various raw materials and rising utility costs. In addition, geopolitical risks and exchange-rate fluctuations continue to make the outlook uncertain.」

「Although we continued appropriate expense controls and implemented nimble measures such as price revisions for core products in October, segment profit was ¥4.34 billion, down 16.3% year on year, due to soaring raw material prices, particularly for beef, and higher utility costs.」

「Regarding costs, the outlook remains extremely uncertain due to soaring raw material prices, including beef, as well as rising utility costs, geopolitical risks and the weakening yen, but we continue to work to reduce food waste and strengthen expense controls.」

「Costs remain subject to extreme uncertainty due to soaring raw material prices, including beef, and higher utility costs, as well as geopolitical risks and the continuing depreciation of the yen. We nevertheless continue to work to reduce food waste and strengthen expense controls.」

「We expect operating profit to be ¥3.4 billion, below the level of the fiscal year ended February 2020, due to the impact of unprecedented increases in raw material prices and energy costs.」

「Although the overall market for the food-service industry has stagnated, partly due to the impact of COVID-19, competition has become increasingly intense as the customer base has shifted amid the diversification of sales channels in response to consumer needs under the new lifestyle, including entry by other industries such as the prepared-food industry and convenience stores selling boxed meals and prepared dishes, as well as the rapid expansion of delivery businesses.」

「Although the operating environment remains challenging due to factors including rising seafood and other food ingredient prices and higher labor costs resulting from increases in part-time wages, revenue growth outpaced the increase in costs, resulting in higher profit.」

「Although the overall food-service market has stagnated, the number of stores continues to increase, while entrants from other industries, such as convenience-store sales of boxed meals and prepared foods, have diversified customer needs and changed the composition of the core customer base, making competition even more intense.」

「Revenue was ¥1,506 million, down 10.2% year on year. The main reasons for the decline were sluggish same-store sales amid intensifying competition in the steak and shabu-shabu businesses, as well as a decrease in the number of stores. The decline in revenue resulted in a segment loss of ¥740 million, representing an ¥852 million year-on-year decline in profit.」

「Operating profit declined due to higher labor costs resulting from soaring food material prices, particularly for meat and rice, labor shortages, and higher hourly wages for part-time workers.」

「Profit declined due in part to higher food material prices, particularly for meat and rice, higher recruitment and training costs to secure labor, and higher hourly wages for part-time workers, which increased labor costs.」

「Revenue was ¥2,248 million, down 2.2% year on year. The main reasons for the decline were intensifying competition in the steak and shabu-shabu businesses, among other factors.」

「The decline in revenue was attributable to intensifying competition in the shabu-shabu and other businesses. As measures to recover customer numbers at existing businesses, the Company expanded the “Meat Day” promotion from the 29th of each month, as held through the previous fiscal year, to the 2nd and 9th of each month, and introduced the “G Card,” which awards stamps based on the number of grams consumed and the products purchased across all businesses.」

「Despite higher labor costs due in part to increases in hourly wages for part-time workers and the expanded application of social insurance, segment profit rose on higher revenue and lower cost of sales to ¥1,965 million, up 22.1% year on year.」

「However, revenue declined due in part to the impact of lower customer numbers at Dontei resulting from intensifying competition in the shabu-shabu business.」

「In the food-service industry, competition to attract customers is intensifying not only among competitors but also with companies in other industries, while key costs such as raw materials and labor remain elevated, making the business environment increasingly challenging.」

「However, revenue declined due in part to the impact of lower customer numbers at Dontei resulting from intensifying competition in the shabu-shabu business, and the segment loss was ¥99 million, representing a ¥40 million year-on-year decline in profit.」

「However, revenue declined due in part to the impact of lower customer numbers at Dontei resulting from intensifying competition in the shabu-shabu business, and segment profit was ¥49 million, down 32.5% year on year.」

「As competition to attract customers intensifies not only among competitors but also with companies in other industries, raw material prices and labor costs are rising, and the business environment surrounding the Group is becoming increasingly challenging.」