Driven by our desire to give concrete shape to our corporate philosophy, “Creating Happiness and Harmony in Our Communities,” Lawson, Inc. has worked hard as an integrated, united Group to prevent the spread of COVID-19 in our stores, offices, and other locations and to respond to new normal demands. In concrete terms, we are striving to achieve our Challenge 2025 medium-term vision formulated to mark Lawson’s 50th year in business in 2025. Under the guidance of the Lawson Group Sweeping Transformation Executive Committee, we have been working to renovate stores and refresh our product mixes to better respond to changes in our business environment. We are also striving to solve medium- to long-term issues, secure new revenue-generating opportunities, and foster greater job satisfaction and enthusiasm in pursuit of sustainable growth.
Regarding our domestic convenience store business, amid continued restrictions on various social activities due to COVID-19, we have worked hard to create fuller store displays of the fresh food, frozen food and daily food ranges that we already started to expand last year to enable us to respond more attentively to customer demands. We are also strengthening our range of rice products, cooked noodles, over-the-counter fast foods, and other items to suit people’s movements and we continue to expand the number of stores equipped with a Machikado Chubo in-store kitchen that is attracting consistently high demand.
In terms of store numbers, in the first quarter of FY2021, Lawson opened 190 stores and closed 54 stores, resulting in a net increase of 136 stores and a total number of 14,612 convenience stores in Japan at the end of May 2021. Internationally, we pressed ahead with new store openings, resulting in a net increase of 299 stores and a total of 3,920 international stores at the end of May 2021.
As a result of the above factors, both consolidated net sales of convenience stores sales and gross operating revenue increased year on year in first quarter of FY2021, with consolidated net sales of convenience stores sales totaling 596.9 billion yen (+5.2% year on year) and consolidated gross operating revenue totaling 169.2 billion yen (+8.9%). Meanwhile, existing-store sales in Japan increased by 2.6% year on year in the first quarter.

On the profit front, our successful efforts to expand product ranges and create fuller store displays to satisfy customer demands resulted in an increase in profits from the Japan convenience store operation. Our international convenience store operation also reported a rise in profits in the first quarter as Lawson became the largest Japanese convenience store operator in Mainland China in terms of store numbers and existing-store sales proved consistently buoyant. Seijo Ishii reported an increase in profit on the back of consistently high supermarket demand and strong sales of original Seijo Ishii fresh deli items. Our finance-related business also generated higher profits thanks to au PAY and WebMoney cashless payment services, the opportunity to charge an ATM fee for PayPay services, and new contracts with credit unions. While performances and large-scale events remained subject to COVID restrictions, an increase in ticket handling for online live events resulted in a higher first-quarter profit for our entertainment-related business as well.
On the cost front, we implemented various campaign measures while continuing to work to reduce the cost of various items, including promotional materials. As a result, consolidated operating income for the first quarter of FY2021 totaled 10.6 billion yen (+7.9 billion yen, or 304.6%), consolidated ordinary income totaled 10.3 billion yen (+9.1 billion yen, or 760.1%), and consolidated net income totaled 5.6 billion yen (v. -4.1 billion yen in 1Q FY2020).

We have also been working to reduce the amount of plastic bags, product containers and packaging as well as food waste and CO2 emissions through our “Whew!” Kindness Project designed to help solve environmental issues. In April 2020, we endorsed the Task Force on Climate-related Financial Disclosures (TCFD) and have been analyzing climate-related risks and opportunities, investigating the impact on our business strategy and considering appropriate measures, as well as proactively disclosing pertinent information. Furthermore, we have been challenging even higher goals by heralding our Lawson Blue Challenge 2050! in order to help realize a decarbonized society in 2050 and secure a rich, blue planetary environment for future generations.

Key Actions Taken in the First Quarter of FY2021

As part of our aim to ensure Lawson is loved and recommended by all customers, we have worked to strengthen initiatives designed to achieve our three key outcomes of superior taste, human kindness, and environmental (Machi) friendliness.

•We are proceeding to plan with the renovation of 500 stores that has been underway since May under the guidance of the Sweeping Transformation Executive Committee. Based on the verification results for these stores, we are carefully selecting further stores to expand the renovations from June onwards.

•Sales of fresh foods, frozen foods, daily foods, Japanese and Western sweets, and alcohol all continued to rise. We had been expanding these ranges since last year to support customers’ daily lives. In the rice category, our renewed “True Lunchbox” series sold well following improvements in March that kept it chilled and fresher for longer.

•Customers appreciated our Machikado Chubo in-store kitchen (in 6,700 stores at end May) efforts to promote collaborative products with restaurants when people had less opportunity to eat out. We intend to continue expanding the number of stores offering Machikado Chubo Kitchen services to meet customer expectations.

•To meet growing demand for food delivery services in the wake of COVID-19, in April, we added Wolt to our existing foodpanda and Uber Eats delivery service. At the end of May 2021, 1,635 stores in 28 metropolitan and urban areas were able to offer food delivery through these three services.

•We launched a face-to-face consultation service regarding COIVD-19 vaccination reservations at some of our Care-focused LAWSON stores (which have a nursing care consultation desk and salon space) in order to help solve customer problems.

•Lawson was included in Japan’s 2021 Health & Productivity Stock Selection (4th time), Japan’s 2021 Certified Health & Productivity Management Outstanding Organizations (5th time) and was selected as a Nadeshiko Brand, a listed enterprise that does exceptional work to promote the success of women in the workplace. (6th time, most chosen Retail Company).

•On May 7, 2021, we concluded a comprehensive business alliance with H2O RETAILING CORPORATION designed to enhance corporate value by leveraging our mutual strengths companies and to strengthen the building of sustainable communities. Under the agreement, we will gradually switch all 98 ASNAS in-station and convenience stores operated by H2O Retailing Group firm asnas Co., Ltd. to the Lawson brand from July. We will also proceed with specific discussions in various areas, including products, logistics, marketing, and sustainability.

•Based on the joint business agreement concluded with POPLAR Co., Ltd. in September 2020, we converted 116 stores into either LAWSON POPLAR or LAWSON brand stores.

We intend to undertake various challenges in FY2021 led primarily by the Sweeping Transformation Executive Committee in order to help realize our Challenge 2025 vision. We would like to ask our shareholders and investors for their continued understanding and support.