Top Management Message June 3, 2002

On May 31, 2002, a foreign object was found in a rice ball product (Jikamaki Onigiri Ishiyakifu Bibinba), which is sold at Lawson stores in Miyagi, Yamagata and some areas of Fukushima. We have received a large number of inquiries regarding the incident from our shareholders and investors. I would like to take this opportunity to address two matters.

1.Effect on Lawson's Results

  • On June 1 and 2, after the incident, year-on-year sales at existing stores in the Tohoku Second Sales Division, an area centered on Sendai where the incident occurred, were around 10% lower in main dishes and approximately 4% lower across all product categories, compared with the nationwide Lawson average. We believe this decline is caused by insufficient deliveries of main dishes to Lawson stores due to the transfer of production to a different factory, and customer reaction to the incident. As far as we can see at present, and as we reported recently, the incident has not affected sales of main dishes on a nationwide basis. However, we will keep a watchful eye on the situation and report back in due course

2.Response to Other Vendors and Franchise Owners

  • At Lawson, the CEO is immediately informed of incidents of this importance. A task force is then formed to deal with the matter, headed by Executive Officer Nakajima (Chief Risk Officer (CRO) and concurrently General Affairs Director)
  • This mechanism was triggered by the recent incident, and I was immediately briefed on the situation before dawn on June 1. Then, on my directions, a CRO-led task force was established to start dealing with the situation.
  • At the same time, I gave the instraction that all manufacturers supplying products to Lawson be contacted via Area Managers in Product Logistics Department in order to inform them of the facts surrounding the incident and to request a tightening of quality control.
  • Store supervisors, meanwhile, were quickly briefed and used this information to report to franchise owners across the country.

For further information, please contact Corporate Station IR

June 3, 2002

Takeshi Niinami
President and CEO

Archives(Back Numbers)