Pan Pacific International Holdings Corporation
February 10, 2021

Overview of Q&A session at analysts briefing for 1H FY June 2021.
(July - December 2020)
This document provides an overview of the Q&A session at the analysts briefing for thefirst half results. Questions and answers have been edited for clarity.
Q1. OP has already exceeded 5 billion yen in the first half, but the upside revision for
the full year is only 3 billion yen. What risks do you foresee for the second half ofthe year, and what are your concerns?

A: The upturn in the first half of the year was due to improved GP resulting fromincreased sales, changes in GPM, and delays in the timing of planned
investments. We based the revision for the second half on a carefulassessment of the current COVID-19 situation. Although inbound demand has
disappeared, sales or city center stores remain at about 100% YoY excluding
tax-free sales. However, customers' CV+D+A*1 have been redefined by
COVID-19 and it will take a certain amount of time for us to adapt to this change.
We are taking a conservative approach and remaining aware that if COVID-19
is somewhat contained in the second half of the year, the strong performanceof our suburban stores (UNY, UDR, etc.), which propelled the first half numbers,
may subside to some extent. We remain committed to our full-year guidanceas we promised at the beginning of the fiscal year, taking into account theupturn in the first half.
*1 CV = convenience, D = discount, A = amusement
Q2. Can you tell us about the annual progress of the main group companies in termsof earnings revisions?

A: Due to COVID-19, the future remains highly unpredictable, as evidenced by
the recent third wave of infections in Japan. We have therefore left the overallsales figures unchanged.
Broadly speaking, during this pandemic, we have made three plans, eachspecific to the types of stores as follows: stores that sell fresh food, stores that
don't sell fresh food, and stores in urban areas. Our three companies that sell
fresh food, UNY, UD Retail, and Nagasakiya, have outperformed their initialPan Pacific International Holdings CorporationFebruary 10, 2021

budgets. We expect this trend to continue in the second half.
Additionally, although inbound demand has disappeared, we believe that someof those lost inbound customers are instead going to our overseas DON DON
DONKI stores in Asia, and there is high room for growth in Asia.
Q3. In the current fiscal year, performance was driven by several positive factors,
especially overseas stores and UNY. Do you believe there will be a negativerebound in the next fiscal year? Additionally, is there any risk of Don Quijote's
structural reform becoming misaligned? Will you be able to maintain thesustainable growth of the Group?

A: At this point, we are relatively optimistic about the next fiscal year.
At this meeting, we focused on Don Quijote, and explained our new CV+D+A,
productivity improvements, digitalization efforts, and PB. However, these
initiatives are not unduly center skewed towards Don Quijote. Rather, our viewis that they reflect overall customer changes, with Don Quijote being the mostaffected. We have been gradually announcing our commitment to the majorparts of our strategic actions, towards bringing this issue to a successful results.
There is no need to worry about the outlook for the next fiscal year.
Of course, there may be some irregular figures later on. In the U.S., forexample, stores that were able to capture stay-at-home demand performed
well, while stores that usually rely on high inbound demand declined, but thishas started to be equalized. We are working to capture even more demand bycatering to customers' new lifestyles, such as creating eateries and grocerants.
Asia is now in a growth phase, so we are not particularly worried.
Q4. You have good results from your stores in Asia. Other than the two stores in Hong
Kong that you highlighted, how are the trends in your other stores?

A: We believe there is little risk of market cannibalization in Hong Kong in thefuture. Our current stores are performing well with average monthly sales per
store towards the upper end of 300 to 400 million yen.
In Singapore, each store averages around 200 to 250 million yen.

Pan Pacific International Holdings CorporationFebruary 10, 2021

Q5: Your overseas business is centered on food products. What are your thoughts onGPM?

A: As we mentioned in our overview of the first-quarter results, our businessmodel and value chain in overseas markets are different from those in Japan.
We are making good progress in capturing more of the value chain, although
this may take time to bear fruit. We are seeing signs that sales themselves willlead to higher profit margins.
We are also being aggressive with store openings.
Q6: What are your plans for your overseas locations? Are you only planning to roll out
stores in the countries listed on page 27 for the time being / over the next threeyears?

A: We're considering new areas for store openings. Each market has its own wayof doing things, and we haven't excluded any particular countries, so we can't
be specific at this time. However, since many countries have import regulations,
we believe that having an extended value chain will give us a competitive edge.
Q7. What is the timeline for the Don Quijote revitalization project (100-day plan)?
Cutting 30% of your SKUs, etc., could be considered as a risky move. Can you
provide more details on this, including the risks and challenges?

A: Our internal teams are implementing the 100-day plan at several stores, by
coming up with and testing various hypotheses.
We will continue this process of trial and error and keep only the successfulchanges. This strategy does not contain abrupt and drastic changes of storessuch as cutting SKUs all of a sudden. Our sole guiding principle for thesechanges is whether our customers will support them, not whether we think they
are good or not.
End