TENMAYA STORE CO.,LTD.

The Group's core business is retail, and sales plans are formulated based on economic trends, consumption forecasts, and merchandise trends. If economic conditions change beyond expectations or unusual weather occurs, this may adversely affect operating results. As a countermeasure, the Group continuously monitors market conditions and reflects them in sales plans.

Competition in the retail industry is intensifying due to a series of new store openings, with continued openings by competitors, including supermarkets and companies in different business formats, in Okayama Prefecture, Hiroshima Prefecture, and other key operating areas. If competition intensifies and store profitability declines beyond expectations, this may affect the Group's overall operating results. The Group continues to pursue a community-based business approach, but responding to cross-format competition remains a challenge.

There is a risk that natural disasters, fires, unexpected accidents, or similar events could damage store facilities or cause system failures. If a large-scale disaster beyond expectations or a widespread failure of social infrastructure occurs, this may have a material impact on operating results and financial condition. The Group addresses this through the establishment of emergency response systems, but there are limits to fully preparing for unforeseen events.

The Group is subject to a wide range of legal regulations, including the Large-Scale Retail Store Location Act, the Antimonopoly Act, the Food Sanitation Act, and environmental and recycling-related laws. Should any violation of these regulations occur, this may affect operating results through administrative penalties or a decline in social credibility. The Group strives to reduce violation risk by conducting corporate activities with constant attention to laws and regulations.

The Group continuously works to reduce interest-bearing debt and strives to raise funds at fixed interest rates to avoid interest rate fluctuation risk. However, if interest rates and financial markets fluctuate beyond expectations going forward, this may affect operating results and financial condition through an increase in funding costs, among other factors. Maintaining fixed-rate financing is the primary countermeasure.

The Group works to thoroughly manage quality and hygiene under its basic policy of "food safety and peace of mind." If an unexpected product incident causes a decline in confidence regarding safety or quality, this may have a material impact on operating results through customer attrition or reputational damage. This risk is fundamental to the food retail business, and continuous strengthening of the quality and hygiene management system is required.

The Group conducts business targeting a large number of general customers and holds a substantial volume of personal information. While the Group strives to prevent information leaks through the development of internal regulations and employee training, should a leak of personal information occur, this may affect operating results through a decline in social credibility. This is a risk area requiring continuous strengthening of information management systems.

The Group applies the "Accounting Standard for Impairment of Fixed Assets." If the value of held assets declines significantly, or if stores experience reduced profitability due to changes in the business environment or other factors, recognition of impairment losses becomes necessary. The occurrence of impairment losses may have a direct impact on operating results and financial condition, and this risk is particularly likely to materialize in conjunction with declining store profitability caused by intensifying competition.