OOMITSU CO .,LTD.

If unexpected food safety issues occur, such as mis-shipment or sale of expired products, avian influenza, or foreign object contamination, this may impact both sales and product procurement. As countermeasures, the Group thoroughly manages expiration dates, hygiene, and quality based on manuals, and conducts regular hygiene and quality control checks at contract manufacturing plants for private brand products, along with training for personnel in charge of such checks.

Since a certain volume of ingredients is procured from overseas, a weaker yen could raise procurement costs and affect business performance. Major changes in food supply and demand, such as crop conditions, import restrictions, and fluctuations in fishery catch volumes, could pose similar risks. As countermeasures, the Group pursues sustainable procurement by diversifying sourcing countries and enters into forward foreign exchange contracts as needed for directly imported products.

The Group's major customers include major restaurant chains, hotels, restaurants, workplace cafeterias, and small foodservice operators, and overall trends in the foodservice industry directly affect business performance fluctuations. A slowdown in foodservice demand or changes in industry structure could significantly impact net sales. As countermeasures, the Group gathers, analyzes, and shares information on industry and customer trends through daily sales activities to understand customer needs and through communication with business partners, including suppliers.

As the Group handles a large volume of frozen and chilled food products and owns numerous freezing and refrigeration facilities, rising energy prices increase utility costs. In addition, the Group utilizes both in-house delivery and outsourcing, and rising fuel prices or labor costs leading to revisions of outsourcing contracts could increase logistics costs and affect business performance. As countermeasures, the Group is implementing energy-saving measures such as switching to LED lighting and introducing lidded freezer display cases, and is building an efficient delivery system by reviewing delivery frequency and routes.

The Group is subject to a wide range of laws and regulations, including the Food Safety Basic Act, the Food Sanitation Act, the JAS Act, the Act against Unjustifiable Premiums and Misleading Representations, the Antimonopoly Act, the Subcontract Act, the Product Liability Act, the Personal Information Protection Act, and the Building Standards Act. Future amendments to laws or the enactment of new laws could restrict business activities, and increased compliance costs could affect business performance and financial condition. As countermeasures, the Group regularly holds meetings of the Compliance Committee and the Risk Management Committee, provides compliance training for officers and employees, and continuously gathers information on legal and regulatory trends.

Amica stores are concentrated in the Tokai region, so an economic downturn or decline in demand in that region could directly affect business performance. In the wholesale business, the Group is expanding its sales network into the Kanto region, centered on the Tokyo, Yokohama, and Chiba branches, but the risk of regional concentration in the Amica business remains. As a countermeasure, the Group is opening Amica stores outside the Tokai region.

For fixed assets held at wholesale business sales offices and Amica store locations, if book value becomes unrecoverable due to declining profitability, or if impairment losses become necessary due to the closure of unprofitable stores, this could affect business performance and financial condition. As a countermeasure, the Group works to restore operations at assets showing signs of impairment and strives to recover invested amounts.

The Group operates business locations in the Tokai, Kanto, and Kansai regions, and the occurrence of a natural disaster could cause damage to personnel and buildings, as well as delays or suspensions in logistics and service provision. Catastrophic damage to core computer systems, or changes in consumer behavior due to weather factors such as a cool summer or warm winter, could also affect business performance. As countermeasures, the Group regularly conducts disaster drills, maintains emergency contact networks, backs up data, decentralizes core systems, and mitigates impact by conducting sales activities across a wide range of customer business types.

The Group handles seafood products that must be purchased in certain quantities within short fishing seasons, and misjudgment of demand forecasts or sharp fluctuations in market prices could affect business performance. In addition, for export sales of seafood products, if exports to major customers such as those in China become difficult due to changes in the international situation, trade barriers, or regional conflicts, this could affect operating results and financial condition. As countermeasures, the Group engages in planned purchasing and thorough inventory management while closely monitoring catch volumes and supply-demand trends, and works to develop new export destinations and build diverse sales schemes.

The Group stores and manages personal information of Amica card members, and if information leakage occurs due to a data breach or criminal activity, this could significantly affect business performance through loss of social credibility and the occurrence of damages claims. As countermeasures, the Group appoints an information management officer and establishes and thoroughly enforces internal rules regarding the use and storage of information.