Mammy Mart Corporation

Retail operations and tenant revenue are affected by economic trends and personal consumption, as well as significant fluctuations in fresh food market prices due to abnormal weather and other factors. A sharp rise in interest rates could also affect business performance. Capital expenditure funds are procured through fixed-rate borrowings, and the impact of interest rate fluctuations is considered relatively limited, though this may not hold in the event of a sudden sharp increase.

The supermarket industry continues to experience overstore conditions, and intensified competition is expected due to new store openings. Intensifying competition may affect net sales and business performance. The Company seeks to differentiate itself by strengthening product competitiveness through the development of original brand products and other measures.

As the Company handles a wide range of products from fresh food to processed and prepared foods, the occurrence of food poisoning or similar incidents could have a material impact on net sales and business performance. The Company implements measures such as prevention of food poisoning, traceability management, thorough hygiene control, product inspections, and compliance with labeling laws and regulations, but these risks cannot be completely eliminated.

The risk of personnel outflow to other companies is increasing, and costs related to securing personnel and rising labor costs are factors that increase expenses. In addition to full-time employees, the Company employs a large number of part-time workers, and increases in insurance premiums and personnel expenses could affect business performance. The Company works to secure and develop human resources through new graduate and mid-career hiring, acceptance of foreign technical intern trainees, internal and external training programs, and self-development incentive programs.

Amid ongoing increases in construction costs and continued labor shortages, rising costs for new store openings and extended construction periods may occur, potentially affecting business performance and financial condition. In addition, regulations such as the "Large-Scale Retail Store Location Act" may require time to establish store dominance in a given area. The Company has established three store models—"Mammy Mart," "Seisen Ichiba TOP!," and "Mammy Plus"—and promotes strategic store openings tailored to regional needs.

The Company manages customers' personal information in connection with providing the V Point service, and in the event of an information leak, the Company could face damage claims as well as loss of social trust, potentially affecting business performance. The Company strives for thorough legal compliance through the appointment of an information management officer, the establishment of information security regulations, and employee training.

A wide range of operations, including purchasing and sales, depend on a computer system integrated via a communications network. In the event of a system failure caused by a natural disaster, cyberattack, or similar event, business activities could be disrupted, potentially affecting net sales and business performance. The Company enhances internal management systems, promotes employee training, and reviews and improves its systems in response to advances in information technology and changes in social conditions.

The Company holds substantial fixed assets, including tangible fixed assets related to stores. If store profitability declines due to a gap between projections made at the time of the store-opening decision and actual post-opening performance, impairment losses may need to be recognized. In FY2025 (ended September 2025), the Company recorded an impairment loss of ¥5 million, and the recognition of impairment losses may continue to adversely affect business performance and financial condition in the future.

In the event of a large-scale earthquake, typhoon, or other natural disaster, or an unforeseen accident, at the locations of the head office, distribution centers, or stores, physical damage to facilities and the distribution network could occur, disrupting business activities and potentially affecting net sales and business performance. The Company has implemented measures such as introducing an employee safety confirmation system, formulating disaster response manuals, and conducting evacuation drills.

New store openings are subject to regulations under various laws, including the "Large-Scale Retail Store Location Act," which may require time to establish a dominant store network strategy. Delays in regulatory response could affect the progress of store opening plans and potentially lead to missed opportunities for strengthening competitiveness. The Company addresses this through a flexible store opening strategy utilizing three store models.