Lawson formulated the Challenge 2025 medium-term vision to mark our 50th anniversary in that same year. Seeking to achieve that vision under the guidance of the Lawson Group Sweeping Transformation Executive Committee established in September 2020, we have been working to renovate stores and refresh our product mixes to better respond to changes in our business environment. We have also been striving to solve medium- to long-term issues, secure new revenue-generating opportunities, and improve job satisfaction and enthusiasm in pursuit of sustainable growth across the Lawson Group.
As a result of these efforts, both consolidated net sales from convenience stores and gross operating revenue increased year on year in first half of FY2021 from February through August 2021, with consolidated net sales from convenience stores totaling 1.2270 trillion yen (+4.6% year on year) and consolidated gross operating revenue totaling 348.7 billion yen (+8.0%). Consolidated net income increased to 17.4 billion yen (+426.2%) on the back of increased dividend income and the sale of cross-shareholdings. Meanwhile, existing-store sales in Japan increased by 1.6% year on year in the first half.

The main topics in the FY2021 first-half corporate results are detailed below:

At our domestic convenience store business, we continued to see restrictions on various social activities outside the home due to the COVID-19 pandemic and unfavorable weather in August across a wide area from Western to Eastern Japan also dampened customer visits to our stores. Despite these unfavorable factors, the initiatives conducted under the Committee to meet the needs of customers experiencing new lifestyles proved successful. In addition, franchise owner profits increased year on year thanks to efforts to ensure appropriate business expenses and strengthen product ranges. In terms of store numbers, in the first half of FY2021, Lawson Group opened 292 stores and closed 117 stores, resulting in a net increase of 175 stores and a total number of 14,651 convenience stores in Japan at the end of August 2021.

•We had completed the renovation of approximately 800 stores by the end of August 2021, and expanded the range of products for everyday life such as frozen foods and daily foods, as well as strengthened product appeal in the rice, cooked noodles, and over-the-counter fast food categories, and through our Machikado Chubo in-store kitchen service.

•We had increased the number of stores with a Machikado Chubo Kitchen to 7,100 stores by the end of August 2021, and scaled up our efforts to meet growing food demand and promote collaborate product with restaurants when people had less opportunity to eat out.

•To meet growing demand for food delivery services in the wake of COVID-19, in July, we added DiDi Food to our existing Uber Eats, foodpanda and Wolt delivery service. At the end of August 2021, 2,089 stores in 32 prefectures were able to offer food deliveries through these four services. The number of stores that ask Uber Eats to also handle the delivery of over-the-counter drugs rose to 41 stores in nine prefectures.

•As for our new initiatives, in June we started demonstration testing of AI-facilitated discount sales designed to help reduce food waste. In July, we introduced fuel-cell lightweight trucks that run on hydrogen at our distribution centers in Tokyo. These initiatives are part of our drive to reduce costs while also promoting SDGs.

Regarding our Seijo Ishii business, stores in station buildings and commercial facilities generated strong sales. Roadside store sales also increased in the second quarter on the back of higher stay-at-home consumption demand in the wake of spreading COVID-19 infections. Looking at specific food categories, our popular side dishes, and fresh produce all sold well.

Our entertainment-related business enjoyed a recovery in concert and theater ticket sales volumes and cinemagoers compared to the previous year, and an expansion in the handling of tickets for online live events.

In our financial services business, an increase in the number of ATM charges for cashless payment services along with our new alliances with trust banks helped increase ATM usage.

Looking at our overseas business, the number of international stores increased by 624 year on year to 4,245 stores at the end of August 2021. Of that total, we expanded the number of stores in China to 3,958 stores, where existing-store sales continued to perform strongly thanks to our positive brand image and growing visibility.

In the second half of fiscal 2021, we intend to continue renovating stores under the guidance of the Sweeping Transformation Executive Committee and bring the total number of refurbished convenience stores in Japan for the full fiscal year up to as many as 5,000 stores. Furthermore, in addition to increasing the number of stores with Machikado Chubo in-store kitchens to 8,400 stores, we will work to expand our product lineup and strengthen our product appeal. We will also work to expand business in our other segments and seek, as a united Group, to achieve our full-year forecasts.

In view of these circumstances, our predictions for Lawson’s full-year business performance include consolidated operating income of 50.0 billion yen (unchanged from our initial plan); consolidated net income of 15.5 billion yen (+14.8% above initial plan) to reflect the upward impact from the first-half of the fiscal year, including dividend income from investments and profit from the sales of shares owned for policy purposes, etc., and a 150 yen dividend per share (unchanged from initial plan).

We very much appreciate the understanding extended by our shareholders and investors for our policies and hope we can count on your continued support.