The Circle K Sunkus Group recognizes the following five areas as major risks associated with investors’ decision. Circle K Sunkus will make every effort to prevent these kinds of events from occurring and to respond promptly if they occur. However, an unforeseen event could have an impact on the Group's operating results and financial position.
The Group manages its convenience stores business based on a dominance strategy. The Group’s operating results and financial position could be impacted by shifts in personal consumption owing to domestic economic developments and by unseasonable weather and other changes in the natural environment.
The Group’s businesses in Japan could be affected by disasters or unforeseen accidents or other similar events, which could halt its logistics systems or impede store operations, which could impact the Group’s operating results and financial position.
The Circle K Sunkus Group gives the highest priority to food safety. The Group has already eliminated the use of preservatives and artificial coloring from mainstay products such as rice balls and boxed lunches. Circle K Sunkus also develops new products to consistently offer items that provide customers with peace of mind. Food safety is also ensured using an inspection and control system that involves the implementation of food safety and other inspections at stores. However, the food industry has faced a range of issues in recent years, including BSE, bird flu and genetically modified food products. Although Circle K Sunkus takes steps to identify and take preventive measures to deal with these and other risks, an unforeseen event could impact the Group’s operating results and financial position.
The Circle K Sunkus Group holds franchise store information through its franchise business, and personal information on customers and other individuals gained from sales promotions and purchases made with Edy electronic money-enabled KARUWAZA CLUB cards. To prevent the leak or corruption of this information, Circle K Sunkus takes appropriate security measures in information management, including computer systems. However, there is a risk that unforeseen events such as unauthorized access, damage or infection by computer viruses could result in the leak of internal information, which could prevent the Group from carrying out its operations and other activities.
The Circle K Sunkus Group is subject to laws and regulations concerning food safety, fair business practices, environmental protection and other areas, and is licensed by the authorities to conduct 14 certain businesses. In the course of its business activities, the Circle K Sunkus Group works to ensure compliance with all relevant laws and regulations, while encouraging all directors and employees to understand and practice compliance. To this end, the Group has established an Internal Control & Environmental Management Office to strengthen internal control systems. However, the Group may incur additional costs due to such factors as unforeseen revisions of laws and regulations or changes in public policies, and is exposed to the risk of litigation in the course of its operations. These changes or legal action taken against Circle K Sunkus, or the result of such action, could impact the operating results and financial position of the Group.
In area franchiser operations, the characteristics of each region are respected and importance is given to profitability through synergies with other parts of the Group and results-driven business development in each area. However, in light of changes in Japan’s consumer culture, intensifying competition, and growing disparity in income levels and regional markets, deteriorating operating performance in some areas is a cause for concern. In dealing with this situation, the Group’s policy is to provide the necessary personnel and financial support to area franchisers. However, an unforeseen situation could impact the Group’s operating results and financial position.