Total sales for July 2006 declined 1.6% year on year, to 125,223 million yen. Existing store sales declined 4.9% and average daily sales per store were 491,000 yen. The average amount spent per customer was 581 yen, down 1.1%, and the average number of customers per store per day decreased 3.8% to 843.

Although there was a year-on-year decline in existing store markups, an important performance indicator for LAWSON, the percentage decline was less than that of existing store sales

Customer numbers and sales struggled to grow due to the effect of heavy rainfall from the middle to the end of July as well as a prolonged rainy season.

The discontinuation of Highway Card sales had the effect of bringing down existing store sales by more than 1%.

In July, in the wake of a rush in demand in June ahead of a July 1 increase in the tax on cigarettes, there was a noticeable reluctance on the part of consumers to pay more for cigarettes. Since LAWSON closes its books at 13:30 each day, sales booked after 13:30 on June 30, the final day before the tax hike took effect, were recorded in July. the tax hike affected sales in July by more than 1%.

On July 18, LAWSON launched a campaign where customers who collect enough points during the campaign period get a free picture plate in commemoration of the start of the Happy Child-raising Project. Thanks in part to the success of this campaign, sales in major product categories tended toward recovery.

In the rice dishes category, strong sales of Unagi Kabayaki Bowl (grilled eel basted with a sweet sauce on rice), which exceeded the previous year, the launch of a curry dish in a tie-up with a specialty store, and Gohantei series products drove a recovery in sales from the previous month, although sales were down on July 2005.

In the cooked noodles category, the launch of value-added products and the benefits of promotions lifted sales above the previous July.

Fast food category sales were strong, continuing to grow at a double-digit pace on the back of new product launches and higher volumes driven by promotions.

Excluding Hokkaido, sales of soft drinks and ice cream struggled due to inclement weather.

In August, LAWSON will continue to implement strategies to promote sales, centered on a point collection campaign.

As of July 31, 2006, in addition to our nationwide network of regular LAWSON stores, we had 62 NATURAL LAWSON and 54 LAWSON STORE100 stores.