Royal 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.