TOHO Co.,Ltd.

The Group provides food products and services primarily to the foodservice industry, and if it is slow to gather information on and respond to trends in the foodservice market, there is a risk that its product lineup and services will not be accepted by the market, resulting in a loss of market share. As countermeasures, the Group strives to understand customer needs through day-to-day sales activities and to collect, analyze, and share information on industry and customer trends through close communication with manufacturers and suppliers.

Since the Group's main products are food items, if an accident occurs due to deficiencies in quality control, hygiene management, or labeling, it could lead to a significant decline in sales and a long-term loss of credibility in the business. The Group has established a Quality Assurance Department and continuously conducts regular quality and hygiene inspections and labeling checks at each business site, inspections of manufacturing plants for Private Brand Products, and quality control education for employees.

The Group depends on imports from overseas production areas and factories for the raw materials and products it handles, and there is a risk that imports could be halted due to accidents or conflicts at the production areas or transportation accidents, causing significant disruption to sales. There is also a risk that rising costs due to exchange rate fluctuations could squeeze profits. As countermeasures, the Group diversifies its countries of procurement through multiple suppliers and mitigates foreign exchange risk by settling directly imported goods in yen.

The Group operates subsidiaries in Singapore, Malaysia, and Hong Kong, and there is a risk that major legal or regulatory changes in each country leading to increased costs or new restrictions, or the occurrence of political upheaval, terrorism, or similar events, could disrupt the business continuity of local subsidiaries. The Group maintains close information exchange with local operations, continuously monitors information released by local government agencies, the Japanese Embassy, and the Ministry of Foreign Affairs, and implements various measures with the highest priority placed on ensuring employee safety.

Under a business structure in which many employees are engaged in delivery and in-store sales, if personnel recruitment does not proceed as planned due to the progressing decline in Japan's birthrate and aging population and intensifying competition for talent, there is a risk of stagnation in business operations and a substantial increase in costs. The Group is working to prevent employee turnover through initiatives to improve employee satisfaction and the practice of health management, to improve operational efficiency through the use of IT, to reform its personnel and compensation systems, and to promote the active participation of diverse personnel (women, people with disabilities, older workers, etc.).

There is a risk that, due to drastic changes in financial markets or a deterioration in business performance, the Group may be unable to procure necessary funds as planned, disrupting business operations. The Group addresses this by ensuring diversity through an appropriate spread of funding sources and methods, formulating conservative funding plans, and concluding commitment line agreements with multiple banks in preparation for unforeseen circumstances.

The Group uses borrowings for part of its operating funds, and there is a risk that a sharp rise in procurement interest rates due to changes in economic conditions could affect business performance. The Group conducts regular monitoring of macroeconomic conditions and closely watches actual trends in procurement interest rates, flexibly employing hedging measures in response to the interest rate environment.

The Group uses computers throughout its business operations, including order receipt, inventory management, purchasing, accounting, and human resources, and there is a risk that business operations could be disrupted if a system becomes unusable due to an accident, disaster, or virus infection. The Group addresses this by storing important data at an external data center equipped with disaster countermeasures and maintaining remote backups, installing firewalls and antivirus software, and continuously providing internal training.

There is a risk that an unexpected outbreak of an infectious disease could harm employees' health, and a risk that a sharp decline in demand from the foodservice industry could have a significant impact on the business. The Group has designated the 14th of every month as "Food Safety and Security Day" to disseminate information and raise awareness among all employees, utilizes the experience and know-how gained from the group-wide committee established during the COVID-19 pandemic, and responds flexibly through sales measures such as strengthening operations in lower-risk business formats (hospitals, nursing care facilities, etc.).

The Group operates more than 200 sites across Japan and overseas (Singapore and two other countries), and there is a risk that a large-scale earthquake, storm, flood, or similar disaster could disrupt business operations at each site. The Group prepares for early recovery by establishing a safety confirmation system and emergency contact network, posting emergency evacuation sites and action guidelines at each business site, and stockpiling emergency supplies at major sites.