Zensho Holdings Co., Ltd.

A policy has been decided to reduce the consumption tax on food to 1% for two years starting next April. The restaurant industry, concerned about losing customers due to the dine-in tax rate remaining at 10%, is rushing to expand takeout services, which will be subject to the reduced tax. The tax rate gap with convenience store bento and supermarket prepared foods will widen from 2% to 9%. Watami Chairman and President Miki Watanabe said it will be extremely tough, and industry groups have asked the government for demand-stimulating measures such as issuing premium gift certificates. Zensho Holdings is looking to expand takeout and delivery, and Royal Holdings is also considering a dedicated takeout menu. Retailers say it will take about half a year to update their cash register systems, and with the delay in the government's policy decision, time is running short. Shinichiro Nakamura, Executive Director of the All Japan Supermarket Association, expressed a sense of crisis, saying they will do their utmost to avoid confusion. Many farmers, who are often tax-exempt businesses with annual sales of 10 million yen or less, will receive less consumption tax while their input tax rate remains at 10%, raising concerns about pressure on their operations. The government plans to implement budgetary measures from next fiscal year, including cash flow support. JA-Zenchu Chairman Yoshito Kanno has requested measures to resolve the issues.

The earthquake that struck Kumamoto Prefecture has caused widespread damage to distribution, retail, and food and beverage manufacturers. At Aeon Mall Kumamoto, extensive damage including the collapse of part of the second floor has been confirmed, and four employees remain unaccounted for. Among convenience stores, Seven-Eleven has closed about 80 stores in the prefecture, Lawson 55 stores, and FamilyMart 39 stores, while Don Quijote has one store in Yatsushiro City temporarily closed. In the restaurant sector, Zensho Holdings has suspended operations at a total of 18 outlets including six Sukiya locations, Skylark Holdings at 12 stores in Kumamoto and two in Kagoshima Prefecture, and McDonald's Holdings Company Japan at 12 stores in Kumamoto. In manufacturing, the Suntory Kyushu Kumamoto Plant, Coca-Cola Bottlers Japan Kumamoto Plant, Mercian Yatsushiro Plant, Yamazaki Baking Kumamoto Plant, and Koikeya Kyushu Aso Plant have halted operations and are conducting safety checks.