Belc CO., LTD.

The company has obtained business licenses under the regulation of the Food Sanitation Act, and if food poisoning incidents or social hygiene issues occur, this may affect business performance. Although measures such as prevention of food poisoning, enhancement of product inspection systems, and establishment of traceability have been implemented, hygiene issues affecting the industry as a whole, in addition to company-specific issues, may also impact business performance.

The company operates 144 stores (as of end of February 2025) in the greater Tokyo metropolitan area centered on Saitama Prefecture, and pursues a policy of increasing store density through a dominant area strategy. However, difficulty in securing store locations and intensifying price competition due to increased store openings by competitors may prevent the company from achieving expected results as planned. If it takes longer than expected to establish dominant market areas, this may also affect business performance.

A variety of changes in the external environment—such as intensifying price competition, increased store openings by competitors, declines in the number of items purchased and customer traffic due to economic downturns, and significant fluctuations in fresh food market prices due to abnormal weather—may affect business performance. As a food supermarket operator, the company's business structure is directly exposed to fresh food procurement costs and consumer trends.

The company employs a system of scheduled bulk deliveries from its own distribution centers to all stores, benefiting from the efficiency of centralized distribution. However, if an accident or other unforeseen event occurs at a center, this could delay product deliveries to all stores. The concentration of distribution functions in a single location represents a vulnerability to business continuity.

The company has provided lease deposits in connection with opening leased stores, with the balance at the end of the consolidated fiscal year amounting to ¥10,849 million. These deposits are mainly returned in installments over the lease period, and if all or part of the deposits become unrecoverable due to the economic failure of the lessor or other reasons, this may affect business performance.

At the end of the consolidated fiscal year, interest-bearing debt stood at ¥36,767 million (18.3% of consolidated total assets), of which long-term borrowings (including the current portion due within one year) amounted to ¥34,452 million. As borrowings are mainly at fixed interest rates, the impact of ordinary interest rate fluctuations is considered relatively small; however, a sharp rise in interest rates could affect business performance.

Securing capable personnel, including part-time employees, is essential for business expansion, and the company has established promotion examinations, performance evaluation and incentive systems, as well as various training programs. However, if recruitment and training do not proceed as planned, this could necessitate a review of the store opening plan and lead to a decline in store management levels and merchandising capability, thereby affecting business performance.

The company holds a large amount of personal information and has established internal regulations, employee training, and information system security measures based on the Personal Information Protection Act. In the event that a leakage of personal information occurs, this could lead to a decline in corporate credibility and affect business performance.

The company conducts a wide range of operations, including merchandise procurement, ordering, and sales, utilizing communication networks and computer systems. If a system failure occurs due to equipment damage from natural disasters or accidents, unauthorized intrusion by computer viruses, or employee error, this could adversely affect business performance.

In July 2006, the company entered into a business alliance agreement with AEON Co., Ltd. covering product supply, sales promotion measures, and development operations, as well as a capital alliance agreement limiting AEON's shareholding to up to 15% of total shares issued, and has accepted one director from AEON since May 2007. If, for any reason, the alliance cannot be continued, this may affect business performance; however, at present the policy is to continue the relationship, and there are no matters requiring AEON's approval in the company's determination of financial, sales, or business policies.