UOKI CO.,LTD.

The Group operates fresh fish retail and food service businesses for general consumers, and its performance may be affected by domestic economic conditions, consumer spending trends, weather and other climatic conditions, and store-to-store competition with competitors. These external environmental factors are diverse and difficult to control individually. In particular, intensifying competition with competitors over new store openings could directly impact the customer-drawing power and sales of existing stores.

Issues threatening food safety, such as safety concerns over foreign-produced food and radioactive contamination, are becoming more serious. If a society-wide problem occurs, consumer avoidance of seafood and fresh food items may increase, potentially affecting performance. Although the Group pays maximum attention to creating sales floors that emphasize safety and freshness, it may be difficult to address industry-wide problems through its own efforts alone.

While the volume of fresh seafood purchased by general consumers has remained stable, the purchase value has been on a declining trend. In addition, the decline in fish-eating culture in Japan and the decrease in purchase value due to population decline are accelerating. If these trends continue or change abruptly, they could have a material impact on the Group's business performance.

Against the backdrop of increasing global consumption of seafood, there have been moves to restrict catch volumes for certain seafood and surges in fish prices. Rising procurement costs may put pressure on the Group's profitability, and if price pass-through is difficult, this could lead to a decline in profit margins.

The Group is subject to a wide range of legal regulations, including the Large-Scale Retail Store Location Act, the Food Sanitation Act, food safety management regulations, environmental and recycling-related laws, accounting standards, and tax laws. If these regulations are changed, strengthened, or new regulations are established, this could affect performance through increased compliance costs and constraints on business operations.

The Group conducts face-to-face sales at each store in the Fresh Fish Business, and if a natural disaster or accident occurs, it may hinder the continued operation of stores. A large-scale natural disaster or accident could significantly disrupt business activities and affect performance. Although the Group has established accident prevention systems and emergency response systems, there are limits to complete preparedness for large-scale disasters.