President and CEO, Representative Director, Chairman of the Board
The convenience store’s operating environment is changing rapidly today. Fueled by a declining birthrate and aging population, a labor shortage stemming from contraction of the working-age population has emerged as a major problem. As the numbers of working mothers and single person households grow, stores located near people’s homes and workplaces that stock everything they need in the morning and evening remain indispensable to the community.
Anticipating this situation at an early date, we devoted ourselves from fiscal 2016 through fiscal 2018 to providing better support for our franchise owners, improving our product offering, strengthening our store capabilities, and enhancing our new store competitiveness with the aim of “Creating Happiness and Harmony in Our Communities” under our Group-wide 1,000-Day Action Plan. Conducted over four years beginning in fiscal 2015, these efforts included introducing a semi-automatic ordering system and reviewing the franchise contract package for franchise owners. Our objective was to develop a business that brings happiness to everyone concerned, from our franchise owners and crew members to Lawson itself, by establishing a next-generation convenience store model.
Our primary goals have been to provide better support for our franchise owners and to strengthen our store capabilities.
The various countermeasures we have introduced to offset the labor shortage and rising labor costs have included investment in the introduction of digital technologies. We have also devoted efforts to creating stores whose crew members can enjoy more rewarding work, and environments in which housewives, seniors and foreigners can work more easily.
Tablet terminals, POS cash registers with automatic change dispensers supporting foreign languages that free cashiers from conducting mental calculations, and smartphone cash register systems currently under development are among other efforts to reduce the burden on workers.
We also expanded the network of stores equipped with Machikado Chubo in-store kitchens. Besides delighting customers with the delicious taste of home cooking, these offer the additional advantage of enabling staff with no customer service experience to perform food preparation as entry-level work.
Other efforts in this area have included establishing the temporary staffing agency Lawson Staff, Inc. to organize systems for dispatching needed personnel at times of emergency or on ceremonial occasions. Franchise store support measures such as these are making steady progress in terms of labor saving.
At the same time, it is important to enhance our daily life support functions to strengthen the store capabilities. We have improved our product lineup to provide firm support for customers' lives throughout the day, including evening in addition to morning and lunchtime, and made serious investments to equip the stores with open food display cases and taller shelves. Our product lineup has grown from 3,000 to 3,500 items, and the level of daily life support for customers has increased as well.
We reassessed the timing of our three daily deliveries beginning in June of last year, moreover, to enhance evening sales by making it easier for people with busy work and childrearing schedules to shop at their nearby LAWSON later at night. I consider the optimization of our evening delivery services over the course of a year or so with no confusion to be a significant achievement. The project involved making preparations with the understanding of all our partners, including our suppliers, manufacturing plants, and distribution centers. We are currently receiving ample positive feedback from customers, who make such comments as, “My local store is now well-stocked in the evening, too.”
The changes introduced under the Group-wide 1,000-Day Action Plan conducted through fiscal 2018 attracted considerable attention, but this was by no means our goal. We are constantly facing serious issues such as the labor shortage and problems particular to 24-hour operation, with which we and our franchise stores nationwide must continuously contend.
In our franchise business, we seek mutual consideration and mutual prosperity that enable our franchise stores and Headquarters to work together toward sustainable growth. If the franchise stores, our closest and most valued partner, should encounter difficulties, we will naturally join forces to overcome them. If problems should develop at Headquarters, on the contrary, the franchise stores will act to help us solve them. This is why we always consider the franchise stores to be our most valued partner.
Today more than ever, we will collaborate closely with our franchise store owners in discussing issues and problems facing the stores, determining joint courses of action, and ensuring that the stores and Headquarters work together to implement them in the belief that repeated use of this approach will make it even more meaningful.
We at Lawson have always cherished an attitude of consistently building relationships of equality with our franchise stores, sharing on-site problems, and solving them together. In the future, We hope to further increase the speed of this problem-solving process.
Thus, the first priority of our efforts to remain responsive to the needs of our customers and the changes in our communities and society must be to provide both material and moral support for our franchise stores, which face so many daunting issues today.
In the current fiscal year, we introduced a new Lawson Identify Statement, “Hot Station (Best Relief Hub) in Our Communities” as our new Corporate Slogan.
We have been promoting Lawson’s community “health support stations” for eight years now, but I believe that our customers, franchise store staff and Headquarters employees have all developed health awareness on their own by now.
The reputation of our healthconscious product lineup, including the Natural Lawson brand and our product offering that differs in various ways from those of other chains, is now firmly established, and programs such as Healthcare LAWSON and LAWSON hospital stores have gained wide recognition. We also conduct thorough health management of our employees and franchise store staff, and maintain an employee health check-up rate of 100%. We no longer view health as a pressing issue, but rather as something to be improved further.
Conceived in the Showa era, Japan’s convenience store business grew to immense size in the Heisei era that followed. With the nation’s entry this year into the new Reiwa era, we reassessed our target image for the Lawson of tomorrow and made three promises to our stakeholders.
These there promises, “Superior taste,” “Human kindness” and “Environmental (Machi) friendliness,” express our desire to become a Lawson that earns praise as a “truly good store” from any point of view.
The term “Hot Station (Best Relief Hub) in Our Communities” is perfectly suited to describing a store that realizes this vision. In an era ongoing challenges, such as conducting business 24 hours a day and installing restrooms, Lawson has emerged as a “Hot Station (Best Relief Hub) in Our Communities” Today, with approximately 14,500 stores nationwide, the Company is maintaining its essential pursuit of community happiness while evolving with the new era in accordance with its three promises. Our hopes and promises are the basis for our new corporate slogan, “Hot Station (Best Relief Hub) in Our Communities.”
In this connection, please note that the three dots over the “ほっ” (Whew!) in our logo represent the three promises.
Let me begin by clarifying the meanings of our three promises. First, “Superior taste” is applicable but not limited to our food items. We want the products we offer and the wide-ranging services available at our stores to impart good taste to every aspect of customers’ daily lives. This is the source of our promise of “Superior taste.”
Secondly, “Human kindness” is always our first consideration when it comes to our health-conscious product lineup, franchise store working environments and support franchise Store functions. We realize that Lawson has no reason to exist if it is not friendly to the communities in which it operates and, in the end, to the global environment. This is the reasoning behind our third promise, “Environmental (Machi) friendliness.”
Fiscal 2019 has seen the establishment of the new SDGs* Committee. The SDGs comprise 17 goals for sustainable global development, but we believe that simply building Lawson’s business based on our three promises will naturally lead to realization of the SDGs as well.
We also introduced food waste reduction program during the year as part of efforts to reduce food waste and obtain sufficient food for children. The program gives points to customers who purchase boxed meals and rice balls during evening and nighttime hours as their sell-by deadline approaches, while also donating a portion of the income from sales to children’s support groups. Implementation of the program has just begun, but it is certain to produce ongoing results.
We are working to reduce the amount of plastic used by the stores, meanwhile, as part of active efforts to combat the waste plastic issue. We have changed our iced coffee containers to paper cups one after another and refashioned the lids of our MACHI café fresh-brewed coffee containers into shapes that permit trouble-free drinking, even without a straw. We also continue to ask customers at the cash register whether they need plastic shopping bags, chopsticks or spoons. These individual actions may be small, but total resource savings by our 14,500 stores nationwide will doubtless register significant results.
We are committed to conducting our daily activities in the awareness that acting according to the three promises will lead to realization of our corporate philosophy and the SDGs.
*SDGs (UN Sustainable Development Goals): Global sustainability goals adopted by the United Nations General Assembly in 2015 for realization in the years to 2030.
The promise of “Human kindness” applies equally to the determination of work requirements and diversification of Headquarters employees. Lawson has been implementing operational reforms under the Group-wide 1,000-Day Action Plan since its introduction four years ago. It has identified jobs that require long working hours and irregular work styles, discontinued outdated or otherwise inappropriate policies, digitalized routine tasks whenever possible, and introduced reforms to improve work efficiency. This approach to work-style reform has gradually taken root and spread outward from our various regional branches.
In the future, we will accelerate our pursuit of work satisfaction. When employees working a standard shift of 7 hours 45 minutes find the work meaningful, the time they spend becomes meaningful for the Company as well. Even if the time worked is just 3 or 5 hours, we will continue to pay close attention to whether workers find meaning and satisfaction in various styles of working. Recognizing the significance of Lawson’s aims and the role of each individual in achieving them can provide motivation for working. We intend to take up these and other challenges together with our employees.
We have played a leadership role in corporate efforts to diversify human capital. Since 2005, the ratio of women to men among new employees has been close to 50%, and 15 to 20% of new employees today are foreign nationals.
The most important factor in this to me is the birth of new value that occurs when different value cultures collide. This new value leads to innovation, as I believe the Lawson culture demonstrates.
The same is true of our franchise stores. Steps to deal with the labor shortage include making it easier for international students to work, producing multilingual manuals for POS cash registers and using photos and other visuals to make the manuals easily understandable. We intend to accelerate efforts of this kind to develop workplaces in which people of all kinds can work with ease.
Both Headquarters and the franchise stores can create new value by recognizing the value provided by other nationalities and genders. This is the kind of environment we are working to create.
The rights and wrongs of implementing a dominant convenience store strategy have been widely discussed in recent years. Rather than sticking to certain set policies, Lawson has opened stores in communities wherever the need arises, covering every prefecture nationwide ahead of other chains.
This year we plan to open 700 stores and close 700 stores, but this does not imply stagnation. We are targeting growth through assessment of individual communities’ needs and the prospects for stable operation of franchise stores.
I consider it only natural that the system in which virtually every LAWSON convenience store operates during the same hours and offers the same product lineup, which supported rapid growth in the Heisei era, should change along with society. Today, mutual recognition is spreading more and more quickly of the extremely wide diversity of values existing in society at large and among individual customers. The manner in which we respond is of crucial importance.
On another front, we are experimenting with unmanned nighttime store operation that makes the most of digital technologies. We believe this will become requisite in urban areas. We are also increasing the number of LAWSON stores equipped with dispensing pharmacies and nursing care consultation windows in response to feedback from customers such as mothers who tell us they would appreciate having better access to medicine at a nearby LAWSON store when their nursery school-age children develop symptoms such as fevers.
Our stores also serve as regional centers where residents of every generation gather. With the recent proliferation of nuclear families in regional areas and with people everywhere becoming increasingly busy, the community-based LAWSON store has immense potential to create previously unknown value in response to their diversifying needs. We therefore anticipate continuing dynamic growth going forward.
I also foresee a future in which the convenience store becomes an increasingly regional institution. There is, of course, considerable value in making the same products and services available at any store in the country. People in communities with their first LAWSON store often express their pleasure in the new ability to “purchase products that were previously sold only in Tokyo” and thank us for enabling them to “buy products such as tiramisu cakes and GODIVA chocolates dessert close to home.” This is the value of product lineup leveling.
At the same time, however, if the same products and services were offered under the LAWSON signboard in Hokkaido and Okinawa, the respective stores might not really be providing the value their customers are looking for. In Okinawa, for example, we stock a variety of local private brand products through a tie-up with SAN-A CO., LTD., a major regional supermarket chain. Not only do local customers appreciate this, but visitors from other prefectures and outside Japan also appreciate the new value Lawson Okinawa offers through this program. LAWSON stores in Kagoshima prefecture are currently rising to this same type of challenge.
Selling large numbers of basic products nationwide and adding products and services for the sake of regionalism and diversification in this way requires us to determine how to balance the two and add new value. Society’s values will change even more in the Reiwa era. We expect to see increasing demand for a varied mix of LAWSON stores operating under the same signboard, and are preparing to meet this challenge. I believe our ability to achieve sustainable growth into the future will depend on our own efforts and those of our franchise stores.
When traveling around Japan and talking to people, I find there are still many communities that are ripe for a LAWSON store. If we consider only metropolitan areas such as Tokyo, convenience stores may seem to have reached the saturation point, but there are still many people in regional areas who have trouble finding places to shop or who cannot purchase the same products as in Tokyo. The numbers of elderly people and working mothers and their children in Tokyo who find shopping difficult are increasing as well, creating a need for a new type of neighborhood store in urban areas.
I consider determining ways of responding to society’s needs and creating new value to be more important than simply increasing the number of LAWSON stores.
The support it receives from Mitsubishi Corporation is among Lawson’s greatest strengths. We will make the most of this power as a source of both ideas and execution capabilities with respect to the value we offer customers. We make optimal use of Mitsubishi Corporation’s strengths, for example, in such areas as our overseas store development, raw materials procurement and collaboration with overseas brands such as GODIVA. Mitsubishi Corporation’s support has been essential, moreover, to such business reforms as our logistics reorganization and the establishment of Lawson Bank.
Lawson is itself positioned at the interface with customers, of course, grasping their needs and considering ways to meet them. Our most significant responsibility is to assess the variations in orientation that differentiate the customers of individual franchise stores, and to determine strategies for responding to those variations. The underpinning for these activities is provided by our strong, stable logistics and manufacturing bases as well as our overseas network.
Going forward, we will leverage these formidable partnerships to even greater effect in such new fields as financial services and overseas expansion, in addition to our product development and raw materials procurement, as we continue to push forward with our speedy business development. Drawing on the resources of the Mitsubishi Corporate Group, Lawson will maintain its unique character as a listed company at the interface with customers and seek growth by focusing on its stores.
We invite you to follow Lawson's rapid progress as the future unfolds.