Market contraction and intensifying competition in the food-service market

「人件費の上昇をはじめ、原材料価格の高騰や、中東情勢の悪化に伴うナフサ不足に端を発した包材費・店舗建築費の急騰など、さまざまなコストの上昇が収益を強く下押しする要因となっていることに加え、物価高による消費者の節約志向の高まりも相まって、収益確保に向けた経営環境は引き続き厳しい局面が続いております。」

「Rising costs, including labor costs, persistently high raw material prices, and higher store construction and equipment costs, have been factors weighing on earnings. Together with consumers' increasing preference for thrift, this has left the operating environment for securing earnings challenging.」

「In the food service industry, demand for dining out remained resilient, partly due to increased inbound demand. However, rising costs, including surging prices of raw materials such as rice, higher labor costs associated with the worsening labor shortage, and increased store construction and equipment costs, continued to weigh on earnings. Together with consumers' increasing preference for thrift amid broad-based price inflation, this left the operating environment challenging.」

「In the food service industry, demand for dining out generally remained firm due to strong inbound demand and the recovery in foot traffic. At the same time, various costs continued to rise, including labor costs amid the chronic labor shortage, energy and raw material prices, and delivery costs resulting from the 2024 logistics problem, making the operating environment increasingly challenging.」

「Demand for dining out remained firm. However, the operating environment continued to be challenging due to the persistent labor shortage, rising labor and recruitment costs, and continuing surges in raw material prices.」

「In the food service industry, the recovery in foot traffic progressed as events resumed in various regions following the easing of restrictions on activities, and personal consumption showed signs of recovery. Together with the recovery in inbound demand, this kept demand for dining out firm. At the same time, substantial increases in food costs, energy prices and labor costs continued alongside the chronic labor shortage, making measures to address them an urgent priority.」

「Demand for dining out recovered significantly as consumers' desire to eat out, which had declined during the COVID-19 pandemic, increased and inbound demand returned. However, in addition to labor shortages, substantial increases in labor costs, food costs and energy prices were driving up costs, making measures to address them, including passing them on to prices, an urgent priority.」

「As economic activity normalized, the food service industry generally followed a recovery trend compared with 2021. However, substantial increases in labor, food, utility and other costs worsened earnings, while the increase in infected employees disrupted operations in addition to the now chronic labor shortage, and difficult conditions continued.」

「The food service industry had been recovering after the lifting of the Priority Preventive Measures to Prevent the Spread of Disease, but the spread of infections during the seventh wave once again slowed weekday and nighttime customer traffic, leaving sales sluggish. As food and utility costs continued to rise, many companies were forced to pass these increases on to product prices. Operations were also disrupted by the increase in infected employees and close contacts, in addition to the pre-existing labor shortage, and difficult conditions continue.」

「Following the lifting nationwide of the Priority Preventive Measures to Prevent the Spread of Disease from 22 March, Golden Week was free of restrictions on activities for the first time in 3 years, and customer traffic recovered, particularly among families. However, due to changes in lifestyles during the COVID-19 pandemic, nighttime customer traffic did not increase even after restrictions were eased, and nighttime demand for dining out remains challenging.」

「Russia's invasion of Ukraine disrupted global supply chains, and uncertainty about the economic outlook has increased amid expectations of further increases in food and energy prices.」

「In the food service industry, business conditions began to improve following the lifting of restrictions on operating hours and alcohol service. However, while the prepared-food market, including restaurant takeout, remained firm, some formats, particularly those centered on nighttime operations, continued to face difficult conditions.」

「The food service industry was severely affected by restrictions including shorter operating hours and the suspension of alcohol service. In particular, customer traffic fell sharply in August and September, when infections increased rapidly, except at fast-food restaurants.」

「To date, measures including shorter operating hours at restaurants, restrictions on alcohol service, and requests to refrain from dining together and going out regardless of the time of day have been implemented, and the food service industry continues to face an extremely challenging operating environment.」

「The food service industry was one of the industries most severely affected by COVID-19, and sales in April 2020, when the first state of emergency was declared, were the lowest since the Japan Foodservice Association began its survey.」

「The environment in the food service industry deteriorated rapidly as the sharp increase in infections during the third wave led to requests to shorten operating hours in Tokyo, Osaka City and certain other areas, while demand for year-end parties fell sharply toward the end of the year. In addition, as companies continued to have employees work from home, recovery was particularly slow at locations in business and entertainment districts and in formats involving alcohol service, and some businesses closed or changed their formats.」

「The food service industry saw the rate of sales decline trend downward from the low reached in April, when the state of emergency was declared, driven by demand for takeout and delivery. However, in July and August, which normally generate the highest sales of the year, shortened school summer holidays and calls to refrain from traveling during the Obon period reduced customer traffic and affected the recovery in business performance. Recovery has also been slow in locations in business and entertainment districts and in formats involving alcohol service, and difficult conditions continue.」

「The food service industry was one of the industries particularly hard hit by COVID-19. During the state of emergency that began on 7 April this year, customer traffic fell sharply due to requests to refrain from going out, business closures and shorter operating hours, and this trend continued even after the state of emergency was fully lifted.」

「In the food service industry, average customer spend was trending upward due to strong sales of seasonal menu items and menu price revisions, and overall sales remained strong. However, the business environment deteriorated due to competition with the prepared-food market, declining demand caused by Japan's declining birth rate and aging population, rising labor costs resulting from labor shortages and the consumption tax increase, among other factors. In addition, from the latter part of the fiscal year under review, the spread of COVID-19 had a significant negative impact on the industry as a whole.」

「In the food service industry, average customer spend has been trending upward due to strong sales of seasonal menu items and menu price revisions, and overall sales remained strong. However, the outlook remains uncertain due to competition with the prepared-food market, declining demand caused by Japan's declining birth rate and aging population, rising labor costs and shorter operating hours resulting from the recent labor shortage, and the impact of the consumption tax increase on consumer spending.」

「However, in addition to competition with the prepared-meal market and declining demand due to the declining birthrate and aging population, recent increases in labor costs due to labor shortages and other factors, as well as earlier store closing times resulting from reduced working hours, are gradually affecting business performance. Combined with the consumption tax increase from October this year, the outlook remains uncertain.」

「Customer traffic was strong during the extended Golden Week holiday period but slowed after the holidays as consumers became more focused on saving. However, average spend per customer remained firm due to strong seasonal menu performance and menu price revisions, and overall sales exceeded the previous year. The outlook nevertheless remains uncertain due to competition with the prepared-meal market, declining demand associated with the declining birthrate and aging population, rising labor costs due to labor shortages, and the impact of the consumption tax increase.」

「In the food service industry, average spend per customer continued to rise due to price increases and promotions, but customer traffic was affected by an unusual succession of natural disasters, including torrential rain, extreme heat, typhoons and earthquakes, slowing sales growth. The outlook also remains uncertain amid intensifying competition due to labor shortages, higher labor and raw material costs, and the penetration of the prepared-meal market, centered on convenience stores.」

「In the food service industry, average spend per customer continued to rise due to price increases and promotions, but customer traffic was affected by an unusual succession of natural disasters, including torrential rain, extreme heat, typhoons and earthquakes, slowing sales growth. The outlook also remains uncertain amid intensifying competition due to labor shortages, higher labor and raw material costs, and the penetration of the prepared-meal market, centered on convenience stores.」

「In the food service industry, average spend per customer continued to rise on the strength of high-value-added menu items and price revisions, but companies struggled with declining customer numbers, slowing sales growth.」

「Record-breaking erratic weather, including torrential rain, typhoons, insufficient sunshine and heavy winter snowfall, caused abnormal surges in raw material prices, while labor costs continued to rise due to chronic labor shortages and the expanded application of social insurance. This created a challenging environment for generating profits. Many companies consequently raised menu prices, but this resulted in customers staying away, and consumers remained strongly focused on saving.」

「Although food service sales exceeded the previous year's level for 16 consecutive months, the outlook remains uncertain. Persistent severe labor shortages and the impact of erratic weather on customer traffic have led to successive menu price increases by companies facing higher labor and food ingredient costs, raising concerns that this could weigh on household demand for eating out.」

「Although food service sales remained positive for 13 consecutive months, the outlook remains challenging due to the impact on customer traffic of erratic weather, including 21 consecutive days of rain in Tokyo and typhoons crossing Japan, surging vegetable prices caused by prolonged rain and insufficient sunshine, and companies successively raising product prices amid record-high hourly wages for food-service part-time workers in the three major metropolitan areas due to minimum-wage revisions and labor shortages.」

「In the food service industry, service consumption is recovering, supported by continued improvement in employment and income conditions, a recovery in consumer sentiment, slower increases in fresh food prices, and growth in the number of visitors to Japan. However, the outlook remains uncertain due to concerns over persistently severe labor shortages and intensifying competition with other industries such as convenience stores.」

「The food service industry was significantly affected by weather conditions throughout the year, with vegetable prices surging and customer traffic affected by typhoons, prolonged rain and insufficient sunshine in summer, and record-early snowfall in winter. In addition, labor-related costs rose, mainly due to labor shortages, and competition with other industries such as convenience stores intensified. Challenges also include how to attract customers in a society facing an increasingly serious decline in the birthrate and population aging,」

「In the food service industry, vegetable prices surged due to low temperatures in northern Japan and record-early snowfall in the Kanto-Koshinetsu region, while consumers remained strongly focused on saving. Competition intensified with other industries, including strong-performing fast-food restaurants and convenience stores,」

「As consumers have become more focused on saving, companies are required to respond to the diversification of food consumption resulting from changes in consumer lifestyles, including intensifying competition across business formats from convenience stores and others, the successive entry of restaurants into the casual drinking market, and the growth of stores offering generous meat-based portions at affordable prices.」

「The environment surrounding the food service industry has been marked by a shrinking market due to Japan's declining birthrate and aging population, intensifying competition as industries outside food service, such as convenience stores, capture food service demand, a declining working-age population, and surging raw material prices」