Creating Happiness and Harmony
in Our Communities
INTEGRATED REPORT 2021

Turning “change” in the community
into “change” for Lawson

The coronavirus pandemic has triggered major changes in the communities we serve. People's lifestyles have changed drastically, as have their attitudes and values.
Refraining from going out and the shift to remote work have led to changes in behavior and in dietary habits. Social issues such as climate change are becoming increasingly
diverse and severe, which has further increased the social responsibility of corporations. Since its establishment, Lawson has continued to provide new value to thecommunity by responding to the changes and demands of society and picking up on new trends. We are determined to turn this change in the community into change for Lawson.
With this in mind, we will continue to contribute to the happiness of our community.

Changes inpurchasing behavior
Going out less due to remote work
Fewer unplanned purchases
Increased consumption while staying at home
Changes in commercial districts
Growth of ready-made meals and eating in

Rapid changes in
employment structure

Increased health awareness eight gain or loss and changes in physical condition due
Wto staying at home
Increased interest in foods that improve immune function
Increased awareness of social connectedness
Growth in demand for contactless solutions

LAWSONINTEGRATED REPORT 2021

1

Influx of labor from other industries
Declining birthrate and aging population
Fewer foreign workers due to immigration restrictions

Increased awareness ofenvironmental issues
Increase in natural disasters due to climate change
Demand for CO2 emissions reductions
Demand for food loss and plastic waste reductions
Increased interest in ethical consumption

At Lawson, “Some Things Change”
Change”
and “Some Stay the Same”
Same”
Unchanging Values

Changing Provided Values
FY2025

New convenience

Group Philosophy

VisionCreating Happinessand Harmony in Our
Communities

Our goal is to become the hubof refreshment in every
community.

New hubs of refreshment inevery community

Superior tastes

New Lawson Declaration
Lawson’s Way (Action Guideline)
1. Create stores filled with the best smile in town.
2. Speak out your ideas to take action.

Lawson strives becoming a“Hub of refreshment in every community”
for everyone by offering the three“Whew!” Surprises.
Online medical service

3. Enjoy your challenge.

Three Promises

4. Value your friends to become one.
5. Act in good faith.

*1 Superior taste
 roviding safety/security-oriented overwhelminglyPhigh value-added products and services friendly tosociety and the environment

Superior
taste

Environmental(Machi)friendliness

Humankindness
*1

*2

*3

Surprise “Whew!”
discoveries

Surprise “Whew!”
happiness

Surprise “Whew!”
kindness*2 Human kindness
 upporting health promotion for all people throughS
products and storesSupporting women and seniors as well as
children’s growthProviding comfortable work environments leading
to job satisfaction

Localized stores

FY2022–FY2024

Realize a
new CVS model*3 Environmental (Machi) friendliness oexisting synergistically with communities byCserving as part of the social infrastructureSustainable environment preservation activities
toward a carbon-free society

LAWSONINTEGRATED REPORT 2021

Digital certification2

Editorial Policy

Contents
Introduction

Publication of the Integrated Report 2021
Lawson is working to realize its Group philosophy, “Creating Happiness and Harmony in Our Communities,” through the three promises of
its business policy: “Superior taste,” “Human kindness,” and “Environmental (Machi) friendliness.” Furthermore, to respond to the changes insociety and our customers, in September 2020 we established the Sweeping Transformation Executive Committee, and in April 2021 weformulated Lawson Group Challenge 2025, targeting our 50th founding anniversary in 2025, and started a host of initiatives aimed at
becoming the “No. 1 most recommended store among our customers, society, and colleagues.”
In editing this report, our goal has been to create a communication tool that will help all stakeholders to gain a deeper understanding of
Lawsonʼs initiatives to transform its business to address changes in the community and in the lifestyles of the people living in it in the pursuitof long-term value creation. Looking ahead, we will continue striving to enhance our disclosures and increase transparency in order to
conduct constructive dialogue with our stakeholders.
In preparing this report, we have referred to the International Integrated Reporting Framework promoted by the Value Reporting
Foundation, and maintained close coordination with the entire Lawson Group. I confirm that the production process was proper and that thecontent of the report is appropriate.

Satoshi Nakaniwa
Member of the Board, Executive Managing Officer,
Chief Financial Officer

Range of the report
Although portions of this report were produced incooperation with business partners in fields such as
logistics, food manufacturing and waste disposal, its
focus is primarily on the business activities of Lawson,
its franchise stores and certain affiliated companies.

Lawson has been adopted as a constituent of the ESG investment stock price index.
(Current as of February 2021)

Its adoption accords to all three selection indicators for ESG investments made by the Government
Pension Investment Fund (GPIF).

Reporting period
The primary focus is on targets for fiscal 2020 (March
1, 2020-February 28, 2021), but earlier and later
activities are also discussed. See Lawson homepage
for details:
http://lawson.jp/en/
Future forecasts, projections and plans
This report’s coverage extends beyond current
information and data for the Lawson Group to futureforecasts based on its plans and perspectives at thetime of publication. These forecasts represent assumptions and viewpoints arrived at based on information
available as of the report’s writing. The actual results
may differ from the forecasts due to various circumstances and external environmental factors.

The MSCI Japan Empowering Women Index

The MSCI Japan ESG Select Leaders Index

represents the performance of companies thatconsists of companies with high Environmental,

provide leadership in promoting and maintaining

Social and Governance (ESG) performancegender diversity in their GICS® sector.

selected from its parent index, the MSCI JapanIMI Top 700 Index, targeting 50% of the market
capitalization of each Global Industry Classification Standard (GICS®) Sector of the parent index.

1
2
3
4

Turning “Change” in the Community into “Change” for Lawson...............
At Lawson, “Some Things Change” and “Some Stay the Same”...............
Editorial Policy/Contents............................................................................
Financial & Non-financial Highlights.........................................................

Creating Happiness in Our Communities—Our Story
Our Journey Creating Happiness in Our Communities...............................
Management Capitals Cultivated with the Community..............................
Community Happiness Creation Process...................................................
Materiality for Creating Happiness in Our Communities............................
Challenge 2025..........................................................................................
Lawson Blue Challenge 2050!...................................................................
Message from the President......................................................................

6
8
10
11
13
16
17

Strategy for Creating Happiness in Our Communities
Strategy for Creating Happiness through the Three Promises:
Superior Taste............................................................................................ 24
Domestic Convenience Store BusinessTransforming store displays: Machikado Chubo in-store kitchens projectTransforming store displays: Pursuit of ideal store format projectTransforming store displays: Product renewal projectTransforming profit structures: Unified use of Group data project/
Customer-centric supply chain reform project
LAWSON STORE 100
Seijo Ishii BusinessEntertainment-related Business
Financial Services Business
Overseas Business

Strategy for Creating Happiness through the Three Promises:
Human Kindness........................................................................................ 31
Transforming work motivation: Work motivation reformDiversity and human resource development
Occupational safety and health and productivity management
Social initiatives
Health initiatives
Support for franchise stores
Developing and operating a supply chain with consideration for society(human rights, etc.) and the environment

Strategy for Creating Happiness through the Three Promises:
Environmental (Machi) Friendliness.......................................................... 42
Reduced CO2 emissions
Reduced use of plastics and food loss
Regional cooperation

Message from the CFO.............................................................................. 45* THE INCLUSION OF LAWSON, INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF LAWSON, INC. BY MSCI OR ANY OF ITS AFFILIATES. THE
MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
* GICS® is the Global Industry Classification Standard, an industry classification system created jointly in 1999 by the
U.S.-based Standard and Poorʼs credit rating firm and the global financial group Morgan Stanley Capital International.

A Management Foundation for Creating Happinessin Our Communities
Executives.................................................................................................
Executive Officer Voices............................................................................
Corporate Governance...............................................................................
Compliance and Risk Management...........................................................

47
50
51
56

Finance – Company Information
LAWSONINTEGRATED REPORT 2021

3

Eleven-Year Financial Summary................................................................ 64
Industry Trends and Sales/Store Related Data.......................................... 66
Corporate Information................................................................................ 71

Financial & Non-financial Highlights

Financial Highlights

Consolidated net sales of allconvenience stores

Profit attributable to owners of the parent /Profit per share

Operating income

Gross operating revenues by segment

Profit attributable to owners of parent (left axis)
Profit per share (right axis)

2,349.7

40.8

billion yen

Profit attributable to owners of parent

billion yen
Profit per share(Billion yen)(Billion yen)

2,800

2,157.9

2,283.6

2,424.5

2,506.9

2,349.780billion yen

yen(Billion yen)

73.7
65.8

40

60.7

Domestic convenience
store businessEntertainmentrelated business(yen)

36.4 363

31.5 billion yen

400

422.5 billion yen

57.9 billion yen

62.9

60

2,100

8.6
86

Financial services
business

26.8 268 25.5 255

30

40.8

300

20.1 200

1,400

40

20

700

20

10

8.6 86200

Overseasbusiness

100

61.3

SEIJO ISHII
business

103.0

billion yen
0

2016

2017

2018

2019

2020
(Fiscal year)

Number of stores
Domestic

0

2016

2017

Total assets (left axis)

18,261

Total assets
storesNet assets(Stores)(Billion yen)

15,00014,39915,728

2019

0

2020
(Fiscal year)

17,015 17,516

18,261

1,500

1,000

285.9

866.5

Net assets (right axis)

1,365.4
272.9
281.4

1,342.3

2016

2017

2018

2019

2020
(Fiscal year)

Return on equity (ROE) /Return on assets (ROA)

Total assets / Net assets

Overseas

20,000

2018

281.9

billion yen

ROA
(%)
15

200

10

Dividends and payout ratio
Dividends (left axis)

ROE(Billion yen)
272.9
300

0

ROA

billion yen

275.3

1,357.7

ROE

3.2
0.6

Dividends%

Payout ratio

300

9.7

3.0

7.3

2016

2017

2018

2019

2020
(Fiscal year)

0

2016

2017

2018

2019

2020
(Fiscal year)

0

LAWSONINTEGRATED REPORT 2021

0

4

2016

2017

2.3

2018

172.7

255

255

250

180

3.2
1.5

2019

120

0.6

60

2020
(Fiscal year)

0

200
160

95.1

5,000

0

%

240

4.4
5

yen

(%)

10,000
100

150
172.7

(yen)

13.5

9.3

500

Payout ratio (right axis)%

1,365.4

900.2

billion yen

99.7

68.7

150

150
74.6

120
80
40

2016

2017

2018

2019

2020
(Fiscal year)

0Non-financial Highlights

Packaging weight index ofplastic packaging items

CO2 emissions per store*1

Status of reduction in food loss per store

Goals for fiscal 2030

Goals for fiscal 2030

Goals for fiscal 2030

CO2 emissions per store

Plastic for containers and packaging

Food loss per store

Reduction of

50% from fiscal 2013

Reduction of

30% from fiscal 2017

50% reduction from fiscal 2018

Base year

Base year(t-CO2)

100.0

(%)

Base year

120(t-CO2)

87.6

100

101.8

(%)

84.0

165

142
Domestic convenience
store business

5,374

75

75

74.2

Other
business

1,178

70.0
80

Financialservicesbusiness

Entertainment-related
business

100.0

100

Number of employees by segment

50.0

50.9

50

50

25

25

40

0

2013

2020

0

2030
(Fiscal year*2)

2017

2020

0

2030
(Fiscal year*)*1	CO2 emissions are calculated using emissions coefficients by electricity provider*2	Calculated from April 1 to March 31 of the following year to coincide with theadministrative fiscal year
A reduction of 27.1% in fiscal 2020 compared with fiscal 2013
(The figures have been changed due to the change in the coefficient.)* Calculated from April 1 to March 31 of the following year to coincide with theadministrative fiscal year

No. of female managers / Proportion of
female managers among all managers

No. of working mothers / Proportion ofworking mothers among female employees

No. of female managers (left axis)
Proportion of female managers among all managers (right axis)

No. of female managers
Proportion of female managers
among all managers(Persons)
150

100

131
10.7
131

120

7.9

8.3

9.5

10.1

No. of working mothers
Proportion of working mothers
among female employees(%)(Persons)

15

300

2016

2017

2018

Ratio of outside officers

6

%
(%)
30

10

200

5

100

16.0
8.4
4.6
10

0

211
22.2

10.7

50

2019

2020
(Fiscal year)

02030(Fiscal year)

2,309

SEIJO ISHII
business

1,217

22.2

103

92

2020

Ratio of female officers

No. of working mothers (left axis)
Proportion of working mothers among female employees (right axis)

%

127

2018

Overseasbusiness

0

2001

211

67

20

10

23
2005

2010

2020
(Fiscal year)

0

LAWSONINTEGRATED REPORT 2021

5

12

6

12

Creating Happiness in Our Communities—Our Story

Our Journey Creating Happiness in Our Communities
1996

Lawson’s responsiveness to change, carrying on an unbroken line

Launched “Lawson Ticket” service

Since its establishment, Lawson has responded proactively to changes in society, regularly identified customer needs,
and developed new products and services. Lawson, which started as a handyman in the community, is now a componentof infrastructure in the society. To ensure its position as an essential part of the community that provides support forresidents, Lawson is determined to continue pursuing and advancing the “Hub of refreshment in every communities” fromthe customer’s perspective.

1996
Opened the first overseas store in Shanghai, China

1997
Realized Lawson's presence inall 47 prefectures of Japan1989
Launched“Kara-age-kun(fried chicken nuggets)”

1975
Opened the first LAWSON store in
Sakurazuka, Toyonaka-city, Osaka

1977
Started 24-hour/day operations

Introduced “Loppi” multimedia
terminals to all stores

2000

1991

Opened first convenience store insidea hospital, “Hospital Lawson”

Started third-party bill settlement services for the paymentof electricity and water bills

1983

1st

1998

Started third-party bill settlement services
for the payment of electricity and gas bills

1986

Industry

2000
Formed a business alliance with
Mitsubishi Corporation

Started copying andprinting services
Lawson as social infrastructure

Handyman in the community
Contribution to solving social issues

Started the challenges to reduce food waste, plastic use, and CO2 emissions

1992
Opened Station Park Waseda experimental
environment and welfare store
Established the LAWSON Green Town Fund(currently “LAWSON Green Fund”)

1997

2000

S tarted the food waste recycling system
First convenience store to introduce
low-environmental pollution Industry
delivery vehicles using CNG 1st

Mt. Fuji forest improvement project

1995
Collected donations for rescue work after
the Great Hanshin-Awaji Earthquake1998
ISO 14001 certification(Shifted to the operation under a voluntary environmental
management system in December 2019)

ローソン1号店
「桜塚店」

1975

Commencement of the Shinkansen service to Hakata

1983

Sea of Japan Earthquake1989

Era name change (from Showa to Heisei)
Introduction of consumption tax

LAWSONINTEGRATED REPORT 2021

6

1991

Gulf War/Collapse of Japan’s bubble economy

1995

1999
Stopped including chopsticks, spoons,and forks in boxed meals

Great Hanshin-Awaji Earthquake

1997

Consumption tax increase: 3% to 5%

2014
Seijo Ishii

2001
Started automated teller machine (ATM) service
Established a joint ATM management company “Lawson ATM
Networks, Inc.”

2001

Launched the operation of
Lawson Bank, Inc.

2018

Launched the Coalition
Loyalty Program Ponta

Acquired supermarket chain SEIJO ISHII CO., LTD.

2014
UNITED CINEMAS

Established the
LAWSON Farm

2004

2015

Established Lawson HMVEntertainment, Inc. (currently
Lawson Entertainment, Inc.)

2005
Opened the first “LAWSONSTORE 100” store

Introduction of
POS cash registers
with automaticchange dispensers

Opened first “Care-focused
LAWSON” with nursing careconsultation desks for seniors.

2011

Started Yu-Pack; Japan Post’s
domestic parcel delivery service

2019
Started tie-up with Uber Eats

2020

Introduced the “foodpanda”
food delivery service

Started the operation of fully
customer-operated new-type
POS cash registers

Nationwide rollout of oneof China’s largest
Industry
settlement services, 1st“Alipay.”

Started operation of Machikado
Chubo in-store kitchen

Started demonstration
experiment of “LAWSON
Fujitsu Shinkawasaki TS
cash register-free store”

2019

2017

2011

2020

Introduction of the LAWSON
smartphone cash register2018

Acquired United Entertainment Holdings Co., Ltd.
via Lawson HMV Entertainment, Inc.

2010

Established “post boxes” in
LAWSON stores nationwide

Our Journey Creating Happiness in
Our Communities

Lawson Bank

2010

Opened first“NATURAL LAWSON”
store

2003

Creating Happiness in Our Communities—Our Story

2018

Building stores meeting
community needs
Started health and diversity initiatives

2011

2007	
Started “Bring Your
2006
Started recycling waste oil in all stores
Launched school afforestation projects

2003
F irst Comprehensive regional agreementwith Wakayama Prefecture in Japan
Opened the first store offering
prescription medicines

2005

The Kyoto Protocol took effect2015

Set up “Support Dreams Fund”(Scholarship Program for victimsof the Great East Japan
Earthquake)

Own Bag campaign”

2014

Opened first eco-friendly model store

Selected as a Nadeshiko Brand(sixth time in total: 2014–2018, 2021)

Set own action targets for reducing
CO2 emissions

2008

Selected for the 2015 Health &Productivity Stock Selection(fourth time in total 2015–2017, 2021)

2010
2008

Great Recession

2011.3.11

Great East Japan Earthquake

Full-scale initiatives for SDGs
2019
2017

E stablished the “SDGs Committee” for the promotion of the SDGs
Formulated the “Lawson Blue Challenge 2050!” environmental vision.

Set up the “Support Dreams Fund”(Scholarship Program for children fromsingle-parent families)

2012

2016

Launched bran bread that contains grain husks
Started mobile sales of food products and daily necessities

Obtained the Resilience Certification

2014

Consumption tax increase: 5% to 8%

LAWSONINTEGRATED REPORT 2021

7

2015

Adoption of the SDGs

2016

The Paris Agreement took effect

2019

2020
Distributed 584,983 free rice balls to after-school
childcare facilities nationwide during the
COVID-19 pandemic
Phased in paper ice cream cups for the in-store
freshly brewed coffee service “MACHI café”.

Consumption tax increase: 8% to 10%

2020

Spread of COVID-19

Creating Happiness in Our Communities—Our Story

Intellectual CapitalManagement Capitals Cultivated with the Community

Membership base for enhancing customer
satisfaction and digital technology for realizing
high-level of store productivity

Under its unique customer-oriented business model characterized by “responsiveness to the needs of everyday life,”“advanced store productivity” and “small commercial area-based manufacturing and retailing,” Lawson will utilize avariety of management capitals cultivated with the community to realize sustainable growth for the company and thecreation of value for society.

Group ID
Ponta membership
Approximately

102.21million people

Lawson online members*1
Approximately

22 million people

CLUB SPICE members card members*2
Approximately

Operating Capital
Diverse store formats and functions that respond to
the needs of everyday life and realize small
commercial area-based manufacturing and retailing

Digital technology
Self checkout registers
L AWSON Smartphone
Checkout service

Domestic Convenience Store Business

14,476 stores
143 stores
679 stores
335 stores

NATURAL LAWSONLAWSON STORE 100
Hospital LAWSON
 tores with nursing careS
consultation desks for seniors

23 stores tores that sell over-the-counterS
pharmaceuticals

250 stores

Seijo Ishii Business

164 storesSocial and
Relationship Capital
Contribution to regions and society tosupport happy communities

Comprehensive regional agreement

57 stores
389 screensUNITED CINEMAS

65 local governments
Total donations collected by stores*

Financial Services Business

8,357,688,554 yen

13,458 Lawson ATMs
Overseas BusinessAll stores
Approximately

500 storesP OS cash register with automaticchange dispenser
Approximately 110 storesEntertainment-related Business
HMV

2.2 million people*1 L awson online members is a membership service offering access to
Lawson Group services such as HMV and “L-Tike.”*2 A membership card for the United Cinemas group

Cumulative amount as of the end of June 2021

3,621 stores

LAWSONINTEGRATED REPORT 2021

8

Creating Happiness in Our Communities—Our Story

Management Capitals Cultivated with the Community

Human CapitalFranchise stores and employees, who are the mostimportant capital for realizing happiness in ourcommunities and advanced store productivity

Financial Capital

10,385 people
Franchise store owners
5,906 people
Store crews
Approximately 184,000 people
Consolidated employees

Multiple store ownership ratio
Multiple store ratio

Stable financial foundation enabling a flexible
response to changes in the community

45.5%
76.1%

Shareholders’ equity

262.5 billion yen

Interest-bearing debt

438.3 billion yen

Selection as a Health and Productivity
Management Brand
4 timesCertified Health & Productivity Management
Outstanding Organization
5 times
Nadeshiko Brand Selection

6 timesNatural Capital
Environmentally friendly stores and functions to help
realize a decarbonized, recycling-oriented society

Stores with CO2
refrigeration systems

4,161 stores

Stores conducting
food recycling

16,837 stores

LAWSONINTEGRATED REPORT 2021

9

Creating Happiness in Our Communities—Our Story

Community Happiness Creation Process
Through the “Three Promises” of its business policy, the Lawson group will respond to changes in the community andcustomer needs, while working to solve social issues. As our responsibilities as part of social infrastructure increase,
we will further evolve as a customer-oriented “hub of refreshment in every community” and contribute to the happinessof the community so that we can continue to be an essential part of it.

Business model that responds tochanges in communities

Issues to be addressed

Creating happiness inour communities

Promise 1
Superior taste
1

Response to social issues

P.34

All
customers
Continued stable store
2
management at franchise stores

3

4

P.38

Promise 2

Pursuit of the ideal format for
stores with enhanced merchandisingand product lineups

P.25

Challenges in new growthfields for the future

P.30

Enhancement of internal controls
and response to business risks

Creating Happinessand Harmony in Our
Communities

Human kindness

Response to material issues through thethree promises and commitment to the SDGs
Business foundation
Job satisfaction

5Group Philosophy

Promise 3
Environmental(Machi)friendlinessSpirit of challenge

Digital

Data

P.56

Medium- to long-term vision for sustainable growth
Medium-term vision
towards Lawson’s 50th
anniversary

Environmental vision

Lawson Blue
Challenge 2050!

LAWSONINTEGRATED REPORT 2021

Strategy promotion system

P.13

New convenience
New hubs of refreshment
in every community

Lawson Group Sweeping
Transformation Executive
Committee

P.15

P.16

“Save ourblue planet!”

SDGs Committee

P.11

10

Creating Happiness in Our Communities—Our Story

Materiality for Creating Happiness in Our Communities
Contribution to the Sustainable
Development Goals (SDGs)
The Lawson Group’s approach to contributing to the SDGs
The Lawson Group believes that striving to realize the Three
Promises to become the hub of refreshment in every community
based on its Group philosophy, “Creating Happiness andHarmony in Our Communities,” ultimately promotes theSustainable Development Goals (SDGs). With this in mind,
we are working proactively to solve social issues.
Establishing systems for contributing to the SDGs andimplementing PDCA cycles
Aiming to realize a sustainable society through our businessactivities, we have been working to establish systems for solvingsocial issues and implementing PDCA cycles for them, including
the establishment of an SDGs Committee in March 2019.

On March 1, 2021 the Company established the position ofChief Sustainability Officer (CSO), with the president and CEO,representative director, appointed to the position. We alsoestablished the SDGs Promotion Department as a dedicateddepartment to further strengthen our initiatives with a new
structure. In responding to issues,, the SDGs Committee periodically identifies issues that align with the Three Promises andshares the progress of the entire Group, while each division
conducts self-directed initiatives in its own business activities.
Furthermore, we have established working groups under
the SDGs committee to strengthen our initiatives on key issues
that require a quick response; namely, CO2 emissions reduction,
food loss reduction, plastic reduction, supply chain expansion,and information disclosure.
Identification of material issues (materiality)
We classify our activities with respect to Lawson’s value chain
into six categories based on the Three Promises to customers
enumerated in our business policy, and in consideration of
pertinent social issues and circumstances. We make decisions
from the customer’s point of view, with the primary emphasis on
the safety and security of retailers and on social infrastructure
initiatives for the retail industry.

Steps to identifying material issues
STEP

1

In order to find issues with heavy impacts on the environment,
society and economy, and then identify Lawson’s own material
issues, we categorized our business activities into value chain
phases, such as raw materials procurement, manufacturing, anddistribution and confirmed what initiative was helpful towardachieving each target or goal of the SDGs by clarifying social
issues in every phase.

STEP

2

From the social issues identified in the feedback or questionnaire
results from stakeholders such as customers, franchise stores,
shareholders, and institutional investors, we selected the issues
with heavy impacts on society.

STEP

3

Cross-checking the social issues identified through stakeholder
feedback with those impacting heavily on Lawson, we prioritized
those necessary for us to become the hub of refreshment inevery community.

STEP

4

We linked Lawson’s initiatives for the specified social issues to theThree Promises, and decided our material issues.

Impacts of identified social issues
Large

Job satisfaction reform

SDGs Committee meeting
Impact on Lawson (impact level)

SDGs Committee Organization(As of end of August 2021)

Board of Directors

Audit & Supervisory Board

CSO (President and CEO)Management meeting
Secretariat
SDGs Promotion Department

SDGs Committee(Held on a quarterly basis: All Division Directors)

Working groups(Held on a monthly basis: General Managers and higher)

Food waste reduction

Food loss
Super-aging societyP rogress of technologicalinnovation

 hanging role of the familyCin society
Deterioration of ecosystems

Compliance

Intensified climate change

Declining birthrate
Declining labor force

Issues of 24-hour operations
Plastic waste issues
 ecline and depopulation
Din local communities

Massive use of natural resources
Increasing health consciousness
Water pollution/shortageIncreasing economic
inequality

S ustainable primary industry(agriculture, forestry, and fisheries sector)

MediumSupply chain expansion
Plastic reduction task force

Large-scale disasterDiversity of human resourcesSuperior taste
Human kindness
Environmental (Machi)
friendliness

CO2 emissions reduction
SDGs Promotion Group Meeting evelopment of a stableD
supply chain

 istribution ofD
safe and secure
products

MediumInformation disclosure

LAWSONINTEGRATED REPORT 2021

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Impact on Society (impact level)

Large

Creating Happiness in Our Communities—Our Story

Materiality for Creating Happiness in Our Communities

The Three Promises and Materiality
Business policy

Superior
taste

Surprise “Whew!”
discoveries

Humankindness

Applicable SDGs

Material issues (materiality)

Providing Safety/Security-oriented
Overwhelmingly High Value-Added
Products and Services Friendly toSociety and the Environment• Providing high value-added private brand products• Deployment of Machikado Chubo in-store kitchens• Planning and developing locally produced products for local
consumption, and spontaneously utilizing domestic ingredients• Developing and selling products under consideration of society
and the environment• Deployment of LAWSON Farm agricultural products• Development of products and services in response to changes
in society• Developing and operating a supply chain with consideration forsociety (human rights, etc.) and the environment• Conducting fair trade with suppliers

Supporting Health Promotion
for All People Through Products
and Stores• Development of products with low salt, low sugar, and fortified protein• No use of preservatives and artificial colors• Creation of a pharmaceutical product sales system• Expansion of NATURAL LAWSON and HealthCare LAWSON• Promotion of health promotion partnerships with local governments• Supporting and subsidizing health initiatives for store owners and crews• Promoting health and productivity management(promoting employees’ challenge for health)• Creating a comfortable work environment for store crew
• Training and retention of store crews• Introduction of an owner support system• Promoting the MO system for multiple-store management• Enhancing communication with franchise stores• Promotion of human resource diversity• Promotion of job satisfaction reforms using DX, etc.
• Development and expanded use of leave for maternity, childcare,nursing, long-term care, etc. (operation of nursery school)

Supporting Women and Seniors
as well as Children’s Growth• Maintaining Scholarship program for children fromsingle-parent families• Promoting fund-raising programs for children’s futures (school
afforestation activities, “Dream Classes”, etc.)• Creation of an environment to support children’s learning• Donation of products to facilities that require food support• Deployment of “Care-focused LAWSON for Senior Citizens”
program (support for long-term care), regional revitalization events• Promoting Safety Station (SS) activities (community watch service
for women, children, and seniors)

Coexisting Synergistically with
Communities by Serving as Partof the Social Infrastructure• Expansion of mobile sales and delivery services• Online product dispatch, returns, and in-store delivery
pick-up services• Promotion of Lawson Bank ATM services, financial
service brokerage• Government certificate issuance services• Executing comprehensive regional agreements with the local
governments, promotion of partnerships• Collaboration with national and local governments to support
stricken areas in the event of disasterSustainable Environment
Preservation Activities Towarda Carbon-Free Society• CO2 reduction: Promoting energy efficient stores and offices(Introducing and operating energy efficient equipment)• CO2 reduction: Utilizing and spreading renewable energy• CO2 reduction: Efficiency enhancement of distribution andpromotion of changeover to environment-friendly trucks• Reduction of food loss: promotion of selling out stock, selling by
weight, development of products with long best-before dates• Reduction of plastic waste: Reduction in amount of plastic used forcontainers, packaging, and sales promotion materials, etc.
• Reduction of use of natural materials such as copy paper, etc.

Providing Comfortable Work
Environments Leading to
Job Satisfaction

Surprise “Whew!”
happiness

Environmental(Machi)friendliness
Surprise “Whew!”
kindness

Major initiatives and services

LAWSONINTEGRATED REPORT 2021

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Creating Happiness in Our Communities—Our Story

Challenge 2025
Review from Fiscal 2017 to Now

2021-2025

Aim to achieve sustainablegrowth built upon former investment
and growth

New convenience2020-

2017-2019
Aggressive IT investment
Next-generation systems
Automatic change-dispensing POS registers
New store computers
Tablets in all stores

New hubs of refreshment in every community

Franchise-store profitfocused management
HQ takes responsibility for helping
maintain franchise store profits

Lawson Group Sweeping
Transformation Executive
Committee
Anticipate new needs
Respond to changing new normal changes

Radical change in customer/
society post-Covid values+

Lawson Group Sweeping
Transformation Executive Committee
Launch urgent response to change

Utilize IT-invested next-generation systems

Fiscal 2017-2019

Fiscal 2020

In the years leading up to fiscal 2019, the Company made continuous efforts to counter the shortage in labor
due to the decline in Japan’s working population resulting from a falling birthrate and aging population, while atthe same time working to provide more services to meet customer demand. We took steps to strengthen ourmerchandising and store capabilities, utilizing the semi-automatic ordering system introduced in 2015 toincrease ordering accuracy and reduce ordering workload, while increasing the height of display shelving instores to increase the number of products on display from 3,000 to 3,500.
At the same time, we made proactive investments in IT with a view to making store operations even more
efficient. In 2017, we introduced tablets to manage store work schedules, creating an environment where store
crews can work uniformly. We completed installation of POS cash registers with automatic change dispensers at
all stores by 2019 and implemented measures to enable cash registers to be operated easily by non-Japaneseor new store crew members. In addition, to meet the demands of night-time customers, we reviewed thedelivery schedule to three times a day in order to strengthen our product lineups.

In fiscal 2020, we expected to see the effects of our previous measures and IT investments, based on franchise store
profit-focused management. However, the effects were difficult to measure as the business environment was dramaticallyaltered by the impact of the COVID-19 pandemic. In particular, after the state of emergency was declared in April 2020, sales
decreased and we were required to attend urgently to finding solutions for the issues of securing an environment wherefranchise stores could operate safely under the COVID-19 pandemic, and on recovering their sales. We took concretemeasures to prepare the operating environment, including implementing rigorous infection prevention measures at stores andquickly providing support from headquarters for stores experiencing low earnings.
In addition, as customers lifestyles changed, demand increased for five categories of products: fresh food, frozen food,daily foods, Japanese and Western sweets, and alcohol; and we strengthened our product lineups accordingly in an effort torestore sales. These efforts enabled franchise stores to maintain profit levels with the previous fiscal year, despite the pandemic.
Furthermore, in a bid to achieve growth in this new business environment, in September we established the Lawson Group
Sweeping Transformation Executive Committee and started initiatives to realize growth strategies for the entire Group.

LAWSONINTEGRATED REPORT 2021

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Creating Happiness in Our Communities—Our Story

Challenge 2025

Overview of Challenge 2025

In addition to sales and profit indicators, strategically select investment
opportunities from a tripartite perspective of the environment, society andcorporate governance in order to achieve sustainable growth.

New convenience
New hubs of refreshment in every community

Challenge 2025 performance indicators

15%
EPS 500 yen

ROE

Lawson Group Sweeping
Transformation Executive
Committee
Anticipate new needs
Respond to changing new normal changes

Utilize IT-invested next-generation systems

Environment

or higher

EPS

FY2018FY2019FY20209.3%
255yen7.3%
200yen3.2%
86yen

Pursuing new ways to provide convenience
with “New hubs of refreshment in every community”
We have formulated Challenge 2025, targeting our 50th founding anniversary in 2025. Under Challenge 2025,
we aim to realize the Group philosophy, “Creating Happiness and Harmony in Our Communities” by becoming
the No. 1 recommended store for our customers, communities, and colleagues and creating “New hubs ofrefreshment in every community,” as we pursue new ways to provide convenience. In our pursuit of new ways toprovide convenience, we established the Lawson Group Sweeping Transformation Executive Committee in
September 2020, and we have launched a range of initiatives to fulfill our business policy comprising threepromises: “Superior taste,” “Human Kindness” and “Environmental (Machi) friendliness.” The committee is madeup of 12 projects and decarbonization, and it is chaired by the president himself to enhance its agility andpromote rigorous progress management on milestones established for each project. The overall projects are
categorized into four themes, namely “transforming store displays,” “transforming profit structures,” “operating• Reduce food waste• Eliminate plastics• Reduce CO2 emissions

or higher

Results
ROE

ESG-focused management

Social• Diversity• Contribute to local
communities• Supply chain management

Governance• Ensure transparent, equitable
management• At least 1/3 outside directors• Set up a Nomination and Remuneration
Committee comprising a majority of
independent officers

companies,” and “transforming work motivation.” The main projects for each theme are as follows. “Transforming store displays”
includes the ideal store format project for realizing merchandize assortments that correspond to customers’ lifestyle changes andconvenient methods of selling, as well as the product renewal project, which aims to provide frozen foods and daily food items thatoffer greater value and ease of use. “Transforming profit structures” includes the vendor distribution project, which aims to optimize
supply chains, as well as the unified use of Group data project, which aims to create earnings opportunities by unifying customer
data from Group companies and using it for marketing. “Operating companies” include the individual operating companies
project, which will work to achieve sustainable growth of operating companies; while “Transforming work motivation” includes
the work motivation reform project which seeks to foster job satisfaction among employees, who are an important foundation of
the business.
In addition to these initiatives, under Challenge 2025 we will also strategically select investment targets from the threeperspectives of environment, society, and corporate governance, aiming to achieve sustainable growth for the entire Lawson
Group. For 2025, we are aiming to achieve ROE of 15% or more and EPS of 500 yen or more.

LAWSONINTEGRATED REPORT 2021

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Creating Happiness in Our Communities—Our Story

Challenge 2025

Milestones for the Lawson Group Sweeping
Transformation Executive Committee
Committee chair: President Sadanobu Takemasu
Machikado Chubo
in-store kitchens

FY2021

FY2022-FY2024

Introduce into more stores, renew menu
Expand daily & frozen foods

Transforming
store displays
P.24

Transforming
profit structures
P.28

Operatingcompanies

P.29

Transforming
work motivation
P.32

Create stores where people
come to purposely shop
for essential daily goods
that satisfy new lifestyles
and values.

Improve profitability offranchise stores, HQ, andoperating companies byreviewing costs and striving
to increase revenue.

Seek to provide new value thathorizontally combines the Group’s
overall strengths.

Continually reform work
motivating factors for all
franchise store, HQ andGroup company employees.

Product renewal

Realize a
new CVS model

Expand daily goods

Horizontal FF firms

Expand “Machi no Deli” products

Pursuit of ideal store format

Reform store displays, new fittings

Area strategy reorganization

Post-Covid new store strategy

Customer-centric supply
chain reform

Design optimal supply chainVendor distribution• Superior tastes• Localized stores• Online medical service• Digital certification

Strengthen profitability throughstructural reform of vendors

Improve vendor productivity, quality

Infrastructure building

Appropriate cost council

Control SG&A expenses, improve office productivity

Work motivation reform

Group branding

Make profitable

Accelerate China store openings, consider new financial services,develop post-Covid entertainment strategy, etc.
Change evaluation systems, support
challenging spirit

Consider job-specific system,
use remote working

Promote interaction among
Group employees

Instill understanding in franchise stores,
externally

LAWSONINTEGRATED REPORT 2021

15

Realize a new formof convenience

Launch new system in 2024

Unified use of Group data

Individual operating companies

FY2025

Ensure lean Grouptransformation and solid
profit sources

Growth for all
operation companies
Improve satisfaction
working for
Lawson GroupCreating Happiness in Our Communities—Our Story

Lawson Blue Challenge 2050!

Towards achieving Lawson Blue Challenge 2050 !
The Lawson Group formulated its environmental vision, Lawson Blue Challenge 2050! in 2019, aiming to realize a decarbonized society by 2050 and ensure an abundant, blue planet
for the future. In June 2021, we revised our CO2 emissions reduction target for 2030 upward from 30% to 50% as part of setting a higher standard to drive our efforts further.
In order to contribute to the ideal world that the Sustainable Development Goals (SDGs) aim to realize, we will continue our initiatives to address environmental issues,
such as reducing CO 2 emissions, reducing food waste, and reducing plastic in containers and shopping bags, as we take on difficult challenges to achieve our goals (KPIs)
for 2030 and 2050.

Form environmental vision, set long-term goals,
take on challenges to achieve a low-carbon society in 2050.
2025

2030

50th anniversary

SDG targets

CO2 emissions per store

CO2

2050
Environmental vision

Lawson Blue Challenge 2050!
—Save our blue planet!—

Reducing CO2 emissions

Reduce by

15 % v.2013 levels

Reduce by

50%*

Reduce by100%

Reducing food waste

Reduce by

25% v.2018 levels

Reduce by

50%

Reduce by

100%

Containers and packaging of
Lawson’s original products
Eco-friendly materials

100

Plastic containers
Reduce by

Reducing plastic

Plastic containers
Reduce by

15 % v.2017 levels

Containers and packaging of
Lawson’s original products
Eco-friendly materials

30%

50% used

Plastic shopping bags
Reduce by100%*Targets revised upward in June 2021

LAWSONINTEGRATED REPORT 2021

16

% usedCreating Happiness in Our Communities—Our Story

Message from the President

Returning to the Group Philosophy

Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board

We will accelerate our transformation into a newconvenience store to support the happiness anddevelopment of our communities.
LAWSONINTEGRATED REPORT 2021

17

The spread of COVID-19 has brought about huge changes in
the world of a kind that occur only once in a hundred years.
Obliged to change their very living patterns, people seem tohave changed their behavior and values. In all of this upheaval,
I have found it most important to review our purpose in society,returning to our group philosophy, “Creating Happiness andHarmony in Our Communities,” and seeing that the work ofeach individual in the Lawson Group contributes to our projectof providing happiness in our communities.
The important point for the convenience store business is
how well we can cope with change. Thus far, LAWSON stores
have provided new forms of convenience to meet societies
needs in each era. These have included both products andservices, such as sales of deep-fried foods, installation of postboxes, printing out copies of residence certificates from in-store
multifunctional copiers, and in-store kitchens. In order to grasp
and respond to the small daily changes and great era-marking
changes in our communities without overlooking them, we must
constantly strive to change ourselves. And I believe that ourdriving motivation in this effort is the Group philosophy,“Creating Happiness and Harmony in Our Communities.” Wheneach individual member of the Lawson Group performs their job
with this philosophy constantly in mind, it leads to thedevelopment and happiness of our franchise stores, and to thehappiness of the community. In turn, the Lawson Group will also
develop. I consider it my duty to set this process in motion.

Creating Happiness in Our Communities—Our Story

Message from the PresidentGroup Philosophy

Creating Happiness andHarmony in Our Communities
VisionOur goal is to become thehub of refreshment in every community.
Business Policy

Three Promises

Superior
taste

Human
kindness

Environmental(Machi)friendliness

Lawson’s Way (Action Guideline)
1. C reate stores filled with the best smile in town.
2. Speak out your ideas to take action.
3. Enjoy your challenge.
4. Value your friends to become one.
5. Act in good faith.

Protecting our franchise stores in order togrow together with them
Before the COVID-19 pandemic, one of the main issues that we
faced was increase store productivity and earnings due to labor
shortages. As a measure to address this, in 2015 we introduced
a semi-automatic ordering system using artificial intelligence (AI)to relieve the burden on franchise stores, and took steps toincrease the accuracy of purchasing operations and reduce thetime needed for ordering. From fiscal 2017 to fiscal 2019, we
accelerated IT investment in stores and focused on increasing
efficiency in store operations. These efforts included distributing
tablet devices to all stores to simplify store work schedulemanagement, introducing POS cash registers with automaticchange dispensers that are easy for senior and non-Japanesecrew members to operate and the LAWSON Smartphone
Checkout service, which allow customers to scan and pay for
products using their own smartphones. I think that these initiatives have proven to be extremely beneficial.
After March 2020, the COVID-19 pandemic expanded
rapidly, with the first state of emergency being declared in April,causing a sharp drop in store sales. The Lawson Group has asystem for direct communication with the President, thatenables franchise stores to send messages directly to me. In
this time of uncertainty about the future, I have received many
messages expressing anxiety through this system. We have
responded by prioritizing the safety of our franchise store andstore crews, and above all that of the customers who visit thestores, implementing rigorous infection-prevention measuresand providing support to franchise stores that have experienced
adverse operations due to a fall in earnings. During this time, wehave continued to reassure our franchise stores that headquarters will protect them, and headquarters has been engaged in ateam effort to support them. We have a responsibility to protect
our franchise stores, but we also have a responsibility not only
LAWSONINTEGRATED REPORT 2021

18

to continue operations in an adverse environment, but to growour business. At the start of the pandemic, we aimed to secure
the profits of franchise stores by controlling their three main
costs—labor cost, food waste loss, and utility cost. The IT
investments we have made to date have been highly effective in
producing efficiency gains in store operations.
We have also been working to strengthen our productrange to encourage customers to visit LAWSON stores forbreakfast and dinner as well as lunch. As the pandemic
continues, many customers hope to be able to meet their needs
at a nearby LAWSON rather than a distant supermarket, and wehave seen some changes in our customer base, such as anincrease in customers who previously did not visit the stores.
As a result, in fiscal 2020 we were able to generate store profit
on par with fiscal 2019. Our franchise stores have told us thatthey found their efforts working together with headquarters toface the COVID-19 pandemic have borne fruit, and that they areglad to have been operating LAWSON stores.

Plastic curtains over the cash register counter
help to prevent infections

Self-checkout registers are used to avoid contact

Creating Happiness in Our Communities—Our Story

Message from the President

Realizing a new type of convenience store
for the post-COVID-19 era
The Japanese economy is expected to begin recovering in
earnest from the end of 2021, when further progress invaccinations has been achieved. However, outbreaks of
COVID-19 are expected to continue sporadically after that,and it is expected that a return to the pre-COVID-19 living
environment will take longer.
In this market environment, I feel that the concept of
convenience offered by convenience stores is gradually being
reevaluated. As I mentioned before, up to now, convenience
stores have grown by responding to changes in the community.
Furthermore, as we overcome countless major changes, suchas natural disasters, our role as part of social infrastructure hasgrown in importance. In addition to the environmental change
caused by the COVID-19 pandemic, we are also required tocope with social changes such as a falling birthrate and aging
population and climate change. In today’s continually changing
world, it seems that now is really the time to consider how
convenience stores should change going forward.
In our Challenge 2025 medium-term vision, formulated to

Delivery of medicine from a store by Uber Eats

mark Lawson’s 50th year in business in 2025, we have set out
to adapt to the changes under the new normal, and beyond
that, aim to realize “new hubs of refreshment in every community.” The Lawson Group will make a concerted effort toachieve this vision.
Convenience stores have been developed in line with auniform standard model for the whole country, but this isgoing to change. Customers’ requirements differ by area,
community, and store locality. By engaging with their needs
properly and satisfying them, we will be able to provide a
new kind of convenience.
Different stores are required to play different roles. For
example, while stores located in city centers are required toprovide convenience predicated mainly on speed, stores insuburban areas are used by a wide range of age groups, andthey fulfill the role of watching over children and seniors. We will
look to provide value that goes beyond the convenience ofbeing able to quickly buy immediate necessities.
In addition, we are also making progress on initiatives
to address social issues. At Care-focused LAWSON stores(with nursing care consultation desks for seniors) we offeredconsultations for booking COVID-19 vaccinations and aservice providing regular medical examinations by arranging

Care-focused LAWSON stores (with nursing care consultation desks for seniors)provide consultations on COVID-19 vaccination bookings

LAWSONINTEGRATED REPORT 2021

19

for a mobile medical examination vehicle in the car park. We
also conduct mobile sales for senior customer and others who
have difficulty going out to shop. These examples embody a
new concept of convenience.
Our “hub of refreshment in every community” is theplace that will be able to provide this new kind of convenience; it is our new vision of a convenience store expressed in
Challenge 2025. I believe that advancing our transformation
towards this goal will enable us to become the “No. 1 mostrecommended store” among our customers, society, andcolleagues (franchise stores and employees, etc.), and lead tothe realization of our Group philosophy, “Creating Happinessand Harmony in Our Communities.”

Bringing transformation to all areas
through the Sweeping Transformation
Executive Committee
With the popularization of remote working and the need tostay at home, customer numbers are falling at stores locatedin office and commercial districts. Meanwhile, stores locatedin residential areas have found they need to stock different

Small-volume deli items sold as the “Machi no Deli” series(Availability limited to parts of the Kanto and Kinki regions)*Images do not depict actual products

Creating Happiness in Our Communities—Our Story

Message from the President

products. Lawson faced a difficult period with the COVID-19
pandemic, but the increase in new demands that are
different from before is also an opportunity. To increase thespeed of our response to change and capture this opportunity,
in September 2020 we established the Lawson Group
Sweeping Transformation Executive Committee, of which I
am the chairman.
The Sweeping Transformation Executive Committee
plays a key role in Challenge 2025. We have established four
themes for sweeping transformation; namely “transforming
store displays,” “transforming profit structures,” “operatingcompanies,” and “transforming work motivation.” The committee is made up of 12 projects related to these themes anddecarbonization activities.
In the project for pursuing the ideal store format, whichis related to the theme of “transforming store displays,” weare promoting renovations aimed at creating stores where
people can easily purchase essential daily goods. This is in
response to an increase in needs for shopping close tohome and having meals at home following the popularization of
remote working and the need to stay at home. To begin, we
renovated 500 stores as pilot renovated stores starting inMay 2021. We are gathering various data from these stores

to use in subsequent store renovations. For example, we areconducting analysis of the data to determine how thevarious conditions in the store, such as its equipment, cancause differences in popular selling products and customer
numbers in stores with the same location conditions. Using
this information, we aim to renovate each store in the optimal way based on data to achieve a better effect, rather
than conducting a uniform store renovation program basedon a set formula. Furthermore, since we have achieved
strong improvements in daily sales at our pilot renovatedstores, in fiscal 2021 we plan to expand the renovation
program to up to 5,000 stores. Moreover, for the Machikado
Chubo in-store kitchens project, which is also related to“transforming store displays,” we will expand our continually
growing Machikado Chubo in-store kitchen products in
response to demand from customers who have found fewer

In-store food preparation service Machikado Chubo

Lawson Group Sweeping Transformation Executive Committee
Organizational structure

Main items

Committee chair: President Sadanobu Takemasu

Transforming store displays

Lawson Group Sweeping Transformation
Executive Committee

Create stores where people come to purposely
shop for essential daily goods that satisfy new
lifestyles and values.
Transforming profit structures
Improve profitability of franchise stores, HQ,

Ideal store
formatHorizontal FF
companies

Product
renewalMachikado
Chubo in-store
kitchens

Group branding

Operatingcompanies

Sales of daily frozen foods

Decarbonization
activities(SDGs
Committee)

and operating companies by reviewing costs
and striving to increase revenue.
Operating companies
Seek to provide new value that horizontally
combines the Group’s overall strengths.

Vendordistribution

Unified use ofGroup data

Customer-centric
supply chain
reformArea strategy
reorganization

Appropriate
policy & cost
councilWork motivation
reformTransforming work motivation
Continually reform work motivating factors
for all franchise store, HQ and Group
company employees.

Self-service sales of individually packaged deep-fried deli items

LAWSONINTEGRATED REPORT 2021

20

Creating Happiness in Our Communities—Our Story

Message from the President

opportunities to eat out due to COVID-19. The project
allows us to prepare products in the in-store kitchen andprovide them right there so that we can respond flexibly tocustomer demand. As of the end of July 2021, we had
installed kitchens in 7,000 stores, and we plan to expand
this to up to 8,400 stores during fiscal 2021.
We will also focus our efforts on daily necessities.
In convenience stores to date, demand for daily necessities
has been centered primarily on urgent purchases. We would
like to change the demand for daily necessities to purchases
by preference. As part of this effort, we have launched a trial
selling MUJI products at around 100 stores.
In our initiatives for “transforming profit structures,” we areworking to eliminate waste to improve the profit structure andto make use of existing assets to generate earnings. In ourcustomer-centric supply chain reform project, we are harnessing the power of IT and AI to help us eliminate losses
due to waste at various points in the supply chain and build
an optimal logistics network. In our project for making unified
use of Group data, we are enabling each individual Group
company’s own customer data to be used in a unified form toenable deeper understanding of customers so that we canmeet their individual needs.
Under the theme of “transforming work motivation,” we arereexamining our evaluation systems to enhance employee
motivation to take on challenges and promoting interaction
between Group employees, among other measures, aiming to
improve job satisfaction among Lawson Group employees, ourimportant human capital.

Taking on challenges for the entire
Lawson GroupThe Sweeping Transformation Executive Committee will also
promote initiatives to encourage the sustainable growth of
our operating companies in each segment. In the China

business, the number of stores exceeded 3,000 in fiscal
2020, and business became profitable on an operating profit
basis. In 2021, we have exceeded 4,000 stores, making us
the largest Japanese convenience store chain in China. Ourearning capability is also growing together with increases instore numbers and local recognition. However, the number ofstores per population is still low compared to Japan, and webelieve there is room to open more stores going forward.
During the COVID-19 pandemic, China required convenience
stores to provide social infrastructure functions. By expanding
our store network into areas where it is needed, we aim tobecome an essential presence for Chinese customers. So far,
we have increased the number of stores by opening them on
our own and through area license agreements with local
partners; now however, we are taking on the challenge of
expanding our business even further in cooperation withleading local business partners.
In our Seijo Ishii business, profit increased again in fiscal
2020 as sales of fresh foods and other products grew atop
an increase in supermarket demand due to the COVID-19
pandemic, while our strong lineup of in-house deli items also
performed well. With the start of operations in our new central
kitchen plant in the spring of 2022, we will expand our store
network and aim for further growth. In the entertainment-related
business, despite restrictions on holding events due to thepandemic, the business is on a recovery trend, as we haveincreased our handling of tickets for viewing live online eventsand responded to demand associated with staying at homeusing e-commerce. Looking ahead, we will take up thechallenge of building an entertainment business designed forthe new normal era, including the use of online live streaming
and so forth. In the cinema complex business, we will continue
to provide exciting entertainment to customers going forward
based on our success in providing a rare space where
customers were able to enjoy entertainment during the
pandemic. In the financial services business, we will continue toexpand the number of partner financial institutions while providLAWSONINTEGRATED REPORT 2021

21

ing various services using ATMs and ATM payment networks.
We will continue to expand these services and while working tostrengthen our earnings base with new initiatives.

DX to contribute to solving social issues
While continuing our existing initiatives to increase the efficiencyof store operations, we believe we should also work to optimize
the overall supply chain with a view to minimizing food waste
losses, mainly though the customer-centric supply chain reformproject that I mentioned, through the further use of digitaltransformation (DX) and AI. Combining the supply chain
expertise of Mitsubishi Corporation with the digital technologies
of its alliance partner, Nippon Telegraph and Telephone Corporation, we aim to optimize our supply chain with regard to foodordering and so forth. In June 2021, we started a demonstration
experiment of a discount sale recommendation service using AI
in the Tohoku area. We are also making progress on a plan forcustomers who use KDDI smartphones, using their smartphone

Creating Happiness in Our Communities—Our Story

Message from the President

Lawson Group Challenge 2025
In addition to sales and profit indicators, strategicallyselect investment opportunities from tripartite perspectiveof the environment, society and corporate governancein order to achieve sustainable growth.

Challenge 2025 Performance indicators

15% or higher
EPS: 500 yen or higher
ROE:

ESG-focused management

Environment• Reduce food waste• Eliminate plastics• Reduce CO2 emissions

Social• Diversity• Contribute to local
communities• Supply chain
management

Governance• Ensure transparent,
equitable management• At least 1/3 outside directors• Set up a Nomination andRemuneration Committee
comprising a majority of
independent officers

position data and LAWSON purchase history to predict when
they are likely to visit a store, then notify them of discounts onrice balls and sandwiches nearing their sell-by deadlines aroundthat time. We will be even more determined to completely sell allof our products than before. We consider DX to be important
not only in the pursuit of efficiency gains, convenience, andimproved earnings, but also for resolving social and environmental issues, and we will continue to work proactively with DX
going forward.

Challenge 2025 performance indicators
The performance indicators for Challenge 2025 include ROE of
15% or higher and EPS of 500 yen. The business environment
has changed dramatically during the COVID-19 pandemic, andsales have also been affected. However, we will respond to thischange by seeking to transform it into an opportunity. I believethat responding to change will dramatically expand our potential. We expected the results of several years of aggressive IT
investment to begin to manifest from fiscal 2020; but the
spread of COVID-19 has made it difficult to gauge the effect.
Nevertheless, looking at it from a different perspective, we seethat a completely different effect has occurred. We completed
installation of POS cash registers with automatic change
dispensers at all stores in 2019. Initially, we expected these tobe effective mainly in responding to labor shortages by
increasing the accuracy and efficiency of payments at thecheckout. As contact between people became an issue during
the pandemic, these cash registers were able to be used as
self-service checkouts, enabling us to meet the needs of ourcustomers. By responding sensitively to these kinds of changes
and keeping up with demand, we will enable customers tocontinue using our stores. The accumulation of small gains will
drive overall sales growth. The task of rapidly implementing our
response to such changes falls to the Sweeping Transformation
LAWSONINTEGRATED REPORT 2021

22

Executive Committee. I think that the key points in meeting our
Challenge 2025 performance indicators will be the degree towhich we can grasp changes in our communities and thedegree to which our individual stores can respond flexibly tothese changes.

Realizing sustainable growth and asustainable society
To realize the sustainable growth of the Lawson Group and asustainable society, Lawson established the SDGs Committee
on March 1, 2019, and on March 1, 2021 the Company established the position of Chief Sustainability Officer (CSO), to which
I have been appointed. We have stated three promises in ourbusiness policy: “Overwhelmingly Delicious,” “Human Kindness”
and “Environmental (Machi) Friendliness.” Through our initiatives
to fulfill these commitments, we are working to provide solutions
for our six material issues and the corresponding Sustainable
Development Goals (SDGs). Furthermore, to help realize theLawsons Group’s sustainable growth and a sustainable society,under Challenge 2025 we intend to practice ESG-focusedmanagement. We will incorporate these three perspectives—
environmental, social, and governance—in the strategic
selection of investments within our activities for reaching our
performance indicators.
Finally, I have around 180,000 colleagues in the Lawson
Group. I want to make our organization one where mycolleagues and I can recognize one another’s value andencourage one another to develop. There are many unique waysthat Lawson can contribute to realizing a sustainable society,both in Japan and globally, using its network of real-world storesin each community. We are committed to our ongoing challengeof creating happiness and harmony in our communities.

Strategy for Creating Happiness in Our Communities

Superior
taste

We will provide safety/security-oriented overwhelmingly highvalue-added products and services friendly to society andthe environment.

Humankindness

We will support health promotion and active roles for all people
and provide comfortable work environments leading to job
satisfaction for everyone who works at Lawson.

Strategy for Creating Happinessthrough the Three Promises
Under “Challenge 2025,” Lawson is looking ahead to its 50th
anniversary with the aim of becoming the “No. 1 mostrecommended store” among our customers, society, andcolleagues, and a “hub of refreshment in every community.”
To realize this new vision for convenience stores, we willquickly grasp social issues and diversifying values throughthe “three promises” of our business policy, responding to
the changes in our communities and customer needs andcontributing to happiness and harmony in our communities.

Environmental(Machi)friendliness

LAWSONINTEGRATED REPORT 2021

23

We will work to co-exist synergistically with communities byserving as part of the social infrastructure, while engaging insustainable environmental preservation activities toward acarbon-free society.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises
Superior
taste

Domestic Convenience Store BusinessTransforming store displays

Initiatives to date
Lawson has developed the Machikado Chubo in-store kitchen
to provide boxed meals and sandwiches prepared in-store. Our
aim is to offer people in the community the pleasure of a mealthat has been made with care in our store.
The Machikado Chubo in-store kitchen concept
developed from our in-store preparation initiative, which
Lawson has been promoting since 2004. The project started
from an idea among franchise store owners and Lawson
employees who wanted to offer hot meals to customers who
found themselves without access to lifeline services such as
electricity, water, and gas due to the impact of the Great East
Japan Earthquake in March 2011.
Since then, through repeated trial and error regarding foodpreparation processes and kitchen facilities, around 7,000, or
48%, of LAWSON stores throughout Japan are now able tooffer this service, and with the support of customers, we have
expanded the number of stores to reach the largest scale inJapan for retail stores with in-store kitchens.
The expansion of Machikado Chubo in-store kitchenswould be impossible without the development of crews

Thick-cut Sangenton pork cutlet sandwich(Made with sauce produced by the Tonkatsu Maisen)

Food being prepared in-store

Machikado Chubo in-store kitchens project

who carry out food preparation, improvement of the
kitchen facilities, and the cooperation of franchise store
owners. We will promote a range of initiatives to expand
the Machikado Chubo in-store kitchens such as making
operations more efficient with the introduction ofself-checkout cash registers and self-service microwave
ovens, thereby creating time for franchise store owners
and crews to increase their skills for in-store food preparation,and conducting human resource development.

Strategies under Challenge 2025

content of each meal to 3 g or less for all products, and reduce
the use of additives to provide delicious and healthy meals.
We are also conducting environmentally conscious
activities. Since Machikado Chubo in-store kitchens enable
us to manage the number of items produced in each store,
they contribute to reducing food losses due to overproduction.
We are also making a proactive effort to eliminate plastic bychanging the bowls used in our rice bowl category from plastic
to cardboard. This is expected to reduce plastic use by around
250 t per year.
We will continue to add more initiatives such as these inorder to provide Machikado Chubo products that can only berealized by Lawson.

Lawson will conduct various initiatives to expand Machikado
Chubo in-store kitchens to even more stores and provide
products that will satisfy customers.
We will develop products that are appealing to customers,such as collaboration products with specialty stores and leading
restaurant chains and the development of local products thatmeet the different dietary needs of each region.
We will also proactively develop and sell health-conscious
products. By fiscal 2022, we will reduce the equivalent salt

Boxed lunch featuring fried chicken with spicy
nanban sauce and five types of vegetables

LAWSONINTEGRATED REPORT 2021

Chicken nanban rice bowl with Sakurajima
chicken raised in Kagoshima Prefecture24

Beef curry developed in collaboration
with Nakamuraya

Authentic Nagoya-style miso pork cutlet rice bowl

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience Store BusinessWe aim to realize an ideal store
format that matches the needs of thetimes and of the local community.

Transforming store displays
Pursuit of Ideal Store Format Project

Yuichi Wada
Senior Executive Managing Officer
Store Operations Division Director—
Corporate Sales and Store Development Division Accelerating Change in the Role of theConvenience StoreThe COVID-19 pandemic has transformed the lifestyles of ourcustomers, driving a marked shift toward buying products atconvenience stores near suburban residential areas. In addition,
the product lineups and services expected of convenience
stores have changed due the increased popularity of fooddelivery services. Customers’ needs have shifted from thetraditional need for so-called time-saving shopping that can bedone conveniently nearby, to the need to buy products
necessary for daily life. The role of convenience stores has
begun to change in turn. For example, in areas where there are
no fruit and vegetable stores, convenience stores sell fresh
vegetables. In areas without fast food restaurants or bookstores,
convenience stores serve as a substitute.
Over the course of their history, convenience stores havecontinued to respond flexibly to the changing needs of thetimes, making the most of their advantages as a small store.
Amid the major changes to the environment triggered by the
pandemic, we are now moving toward the realization of a newconvenience store model.

 Strategies under Challenge 2025
To realize “new hubs of refreshment in every community” thatsuit the new era, we have started the Pursuit of Ideal Store
Format Project.
First, we will differentiate our Machikado Chubo in-store
kitchen products by offering boxed meals and fast foodproducts that meet the needs of the three daily meals–breakfast,
lunch and dinner–taking advantage of our ability to prepare
and serve food immediately in the store. Next, we will gauge
the needs and purchasing behavior of customers, which varyby location, and optimize individual stores through measures
such as increasing the lineup of frozen foods and daily foodproducts through the addition of fixtures. In addition, toencourage new customers to visit our stores, we will actively
introduce delivery services andonline payment services, offering
new ways to use convenience
stores. We will also promote
self-service stores in response to
the increasing customer
preference for a contactless
shopping experience and in
preparation for long-term labor
shortages. These efforts include
Self-service sales of individually packaged
the use of self-checkout services
over-the-counter fast food

LAWSONINTEGRATED REPORT 2021

25

and the introduction of fixtures
for self-service sales of individually packaged over-the-counterfast food. As well as making iteasier for customers to movearound the store as they selectitems to buy, the use of roundcases for multi-faceted display
will also serve to present thesales floor transformation to thecustomer visually.
Round cases for multifaceted display of anassortment of desserts and deli items
We plan to renovate a totalof 5,000 stores in fiscal 2021,
including 500 pilot renovated stores. We will also build new
kitchens. As of the end of July, 7,000 stores were equippedwith kitchens. In fiscal 2021 we plan to expand this to a totalof 8,400 stores.
In selecting stores to renovate, we will analyze thetrends of pilot renovated stores in detail. We will assess
quantitative data on the following four factors: whether thestore has a kitchen or not; daily sales; the population of thecommercial area, particularly the nighttime population; andthe number of years since the store opened. In addition tothese, the hardware condition of the store, the economic
situation, and of course the management ability andmotivation of the owner are also major factors.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience
Store BusinessTransforming store displays
Product renewal project

By implementing these measures, Lawson aims to acquire
a new customer base and expand spending per customer byincreasing the number of purchase items. In this way, we willachieve the targets of Challenge 2025.

We will work to strengthen
our merchandising by rapidly
grasping changes incustomer needs.

A meal made up from products available at LAWSON stores

Hitoshi Fujii
Executive Vice President
Merchandising Division Director

Overview of Fiscal 2020
In fiscal 2020, the spread of COVID-19 caused significant
changes in people’s lifestyles, including increased time at home,mask-wearing, and restrictions on eating out. We responded tothe situation by developing products to capture changes in
consumer behavior, namely increased health awareness,increased hygiene awareness, increased thriftiness, andincreased needs for eating at home.
One of our main initiatives is Machikado Chubo in-store
kitchens. The sense of value attached to freshly prepared food isextremely important, and our numbers show the results of ourefforts to strengthen this initiative, such as collaboration
products with restaurants and products developed under the
direction of partners. We have also seen huge growth in thedaily food product and frozen food categories, where we havelaunched carefully selected products based on a tried-and-truelineup such as gyoza dumplings and sweet-and-sour pork. We
have also strengthened our lineups of desserts and healthfulfood products.
To further improve our profit margin, we are cutting down
on waste by promoting efforts to keep foods fresher for longer
without compromising on taste in our ready-made meal
products. As we continuously revised our ingredients andpackaging, we worked to reduce the volume of plastic
containers and film, making them thinner and converting topaper containers, as well as reducing plastic by changing themix of biomass materials.

Strategies under Challenge 2025
Product renewal is an important project within the theme oftransforming store displays promoted by the Sweeping Transformation Executive Committee. We will dramatically upscale andfurther strengthen our merchandising to increase consumer
recognition of the value of Machikado Chubo in-store foodpreparation. We will also address the issue of low recognition ofdaily food products and frozen foods, which is an area where
customer needs are increasing, by rapidly developing productsthat will capture public attention with their delicious taste andlead to repeat purchases.
In daily food products, we will focus on increasing recognition with new designs, expanding the menu, and increasing thelineup of products with long best-before dates. In addition, we
will emphasize the use of locally produced ingredients, pursuit ofhealth, and reduction of additives. In frozen foods, we are seeing
a shift from commercial use to household use, and from stock
demand to instant meal demand. By focusing on new productproposals, we will realize new sales floor proposals.
In daily necessities, we will turn our attention to improving
sales floor efficiency, continuing to consolidate existing products
while taking steps to introduce MUJI products.

Lawson produce to brighten up meals at home

Tokekoro “melted” croquettes

Hamburger Steak– In rich demi-glace sauce made with sauteed onion–(Launched on August 31, 2021)

Bacon Caesar Salad

Cassata 2 pieces

Other products

LAWSONINTEGRATED REPORT 2021

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• Potato Salad• Lettuce Salad• Mixed Salad• Sesame Dressing 190ml• Casa Subercaseaux Cabernet Sauvignon 750ml• Gold Master 350ml• Koshihikari Rice 180g

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience Store BusinessTransforming profit structures

Transforming profit structures

Unified use of Group data project

Customer-centric supply chain reform project

Using Data to Increase Customer Satisfaction

Tackling Food Loss by Optimizing the Entire Supply Chain

Lawson has been using the POS data and coalition loyalty program member data in store
management and product development to meet customers’ various needs in greater detail.
The unified use of Group data project will widen the scope of data use to include not only
Lawson but also data owned by Lawson Group companies and external data to provide
customers with personalized product and service information tailored to their individual
preferences. The information will be provided in the form of recommendations, coupons, andso forth related to products and services, using appropriate timing and methods of delivery
corresponding to customers’ different interests. Using these data, we aim to offer customers
the experience of a new form of convenience and increase customer satisfaction.

Under the customer-centric supply chain reform project, we are addressing food loss, which isone of Lawson’s target social issues. We will use AI to predict demand for each product basedon individual store data such as weather and sales, then work to optimize the entire supply
chain by making product ordering recommendations based on the predictions.
We have been working to increase ordering accuracy at stores using the semi-automaticordering system introduced in 2015, which uses AI to recommend order volumes based on
store sales capabilities. Now we will increase accuracy using the latest AI technology and aim tocompletely sell all of the purchased products. Previously, discounted sales of products nearing
their sell-by deadlines were heavily dependent on the level of experience at the store. Now, we
will use AI to make recommendations on the amount and period of the discounts based on theinventory status of each store on the day in an effort to more effectively completely sell out of
products. We launched a demonstration experiment for this initiative at certain stores in the
Tohoku region in June 2021. Based on the results, we aim to introduce the initiative to all stores
during fiscal 2023.
We also intend to expand the application of customer-centric demand prediction beyond
increasing ordering accuracy and discounted sales. By optimizing the entire supply chain,including optimization of logistics aspects such as store deliveries and production control at our
manufacturing plants, we will work to reduce food loss.

Reflecting Data in Support for Store Operations
Going further, we will promote initiatives for even more sophisticated use of data. We will
provide data on customer values and links with commercial area maps to support customized
product lineups for each store. This will enable stores to match customers preferred timing insetting up displays, reducing cash register wait times, and providing freshly prepared products.
In addition, we will support new store openings by franchise store owners by using data to help
them understand commercial areas around the location and make decisions.

Proposals with individually tailored content and delivery methods using
Lawson’s data and position information
Smartphone(Internal)
 ast purchase dataP
Past coupon issuance and usage
data (By medium)Attribute data
(External)Position information
Web browsing history
Weather information, etc.

Analyze dataassociated withindividuals to offer
proposals that meettheir needs

SnacksDesserts
Real stores
Image of a discount sale recommendation on screen

LAWSONINTEGRATED REPORT 2021

27

Applying discount stickers with prices recommended using AI

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience Store Business
LAWSON STORE 100

Seijo Ishii Business
Seijo Ishii

Overview of Fiscal 2020
In response to changes in the business environment caused by
the COVID-19 pandemic, we strengthened our fresh meat, fish,
fruits and vegetables, and daily delivery category, expanded our
lineup of frozen foods, and introduced new merchandise tomeet stock needs. As a result, amid a difficult environment weachieved existing-store sales of only 1.6% lower than thoserecorded in fiscal 2019. The cost structure reforms that we
implemented early on were successful, leading to improved
profits from the second half of the fiscal year. Many aspects ofthe value that we provide to our customers still need to evolve,
however, and we are working to resolve these issues so that we
can attract more customers.

 Strategies under Challenge 2025
As a lifestyle-based convenience store, we position fresh foodand daily delivered foods as our strengths. We will continue
refining our ability to support consumers in their daily lives byfocusing on offering seasonal suggestions, communicating withcustomers, and providing safety and security. While examining
macro-consumption trends such as the aging population andthe increasing number of single-person households, we will alsouse customer segment data, which we have included from fiscal
2020, aiming to grow our market share within commercial areas
by working with our franchise stores to accelerate individualstore management.

Guided by the store concept of “a menu-support
convenience store,” the store proposes fresh foodand other grocery products to support people’s daily
diets. The stores also offer its “100 Yen” series oforiginal products.

 Strategies under Challenge 2025
The entire company is working
together as one team tocelebrate the 100th anniversaryof our founding.
Hiroyuki Karasawa
Executive Vice President
Division Director, Corporate Strategy
and Planning Division

Overview of Fiscal 2020
Guided by a corporate philosophy of “quality food for aquality life,” Seijo Ishii is working as one toward the milestone
year of 2027, when it will celebrate the 100th anniversary of
its founding.
In fiscal 2020, Seijo Ishii opened a total of 11 stores—
9 company-operated stores and 2 franchise stores—including
the Sun Station Terrace Okayama store, its first store in the
Chugoku region, bringing the total number of stores to 193 at
the end of fiscal 2019.
Seijo Ishii has differentiated itself from its competitors with
its unique business model of “vertical integration of food,” inwhich all of its processes—from importing, logistics, andmanufacturing to wholesaling, retail sales, and restaurant
operations—are carried out in-house.
In addition, we are working to improve customer satisfaction by discovering and developing products that are unique to
Seijo Ishii without being bound by existing ideas, and by training
employees to refine their product knowledge and sales skills.

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Seijo Ishii will start operations of a new central kitchen plant infiscal 2022. It is advancing a number of initiatives in preparation
for this, such as expanding its store network and developing
new core products.
To expand the store network, as well as strategically
opening new stores, we will cater to the new lifestyles thatemerge after the pandemic by strengthening e-commerceand promoting last mile business initiatives using delivery
services such as Uber Eats. We will use the LAWSON Group
network to increase points of contact with customers andexpand sales channels.
To respond to diversifying sales channels, Seijo Ishii will
strengthen its efforts to provide delicious food when it tastes
best and in perfect condition. It will focus not only on the direct
imports that have traditionally been its specialty, but also by
selling selected seasonal produce from all over Japan. By
properly communicating the value of these products throughstories, we will continue to create new Seijo Ishii fans anddevelop new customers beyond our existing base.

Image of the new central kitchen plant (Yamato City, Kanagawa
Prefecture) scheduled to start operation in spring 2022

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Entertainment-related Business

Financial Services Business
Lawson Bank

 Strategies under Challenge 2025
We will respond to changes
in the market environment
and provide exciting
shopping experiences.
Haruhiko Noborisaka
Deputy Senior Vice President
Division Director of Entertainment
Business Division

Overview of Fiscal 2020
Fiscal 2020 was a year in which the COVID-19 pandemic dealt
a heavy blow to the entertainment industry, triggering drasticchanges in our business environment. In this environment,
we consider it our primary mission to respond to the changing
needs of the community. In our entertainment-related business,
as in our other businesses, we embraced the challenge ofturning adversity into opportunity.
In the ticketing business of Lawson Entertainment, we
expanded the scope of ticket offerings beyond the traditional
event format to include tickets for viewing live online events.
In the merchandise sales business, we targeted online shoppingand holding events, for which demand has increased. In thecinema complex business of UNITED CINEMAS, we enhanced
the variety of screening content and provided new ways ofviewing, such as drive-in theaters, while also taking measures toensure the safety and security of theaters. We have also
adopted a leaner management structure aimed at making all ourbusinesses more resilient against fluctuations in market
conditions. Through these measures, we have put our businessperformance on a steady track for recovery.

The entertainment-related business is much the same as ourconvenience store business, which provides an infrastructure fordaily life. Our primary mission is to respond to the needs of thecommunity and understand our customers, providing a social
infrastructure, whatever the business environment may be.
Our business and all its business domains sit precisely at
the center of a changing market environment where consumption is taking place across the boundaries of goods andservices, real and digital. The COVID-19 pandemic has accelerated these changes, and we recognize that there can be no
return to the past.
In fiscal 2021, which marks the start of Challenge 2025,
we will seize the opportunity to reinforce and enhance our
response to market needs, on which we have relentlessly
focused our efforts to date. To enable our business to continue
to create unique value, we will carry out digital transformation(DX) based on organic collaboration, strengthening ourbusiness foundation and expanding our customer touch points
to create a hybrid business.
The world of entertainment nurtures dreams and hopes,
offering many opportunities to experience happiness. By
maintaining this business as a pillar for sustainable growth of
the Lawson Group, we are responding to the demand of ourcustomers for exciting shopping experiences and fulfilling
Lawson’s group philosophy of “Creating Happiness andHarmony in Our Communities.”

LAWSONINTEGRATED REPORT 2021

29

Overview of Fiscal 2020
In fiscal 2020, the third year of operation of this business, we
continued to achieve profitability as in the previous fiscal year
amid a continuing severe business environment due to theimpact of the COVID-19 pandemic. This was a result of our firm
efforts in the ATM business and retail business, as well as ourefforts to exercise cost control in our operations. This was animportant year in which we were able to launch a variety ofservices. These included the Immediate Account Settlement
Service, which allows customers to charge payment apps andelectronic money from their accounts with financial institutions,and a service that allows customers to charge payment apps
with cash from ATMs.

 Strategies under Challenge 2025
Backed by a network of approximately 13,500 ATMs and more than
370 partner financial institutions, wewill further expand our services bytaking advantage of our uniqueposition as a bank in a convenience
store group, where we connect
finance and distribution. We will
adopt our customers’ perspective as
we work to deliver new levels of
convenience to our customers amida changing environment.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promisesalso developed an application for supervisors to manage thestatus of their guidance to franchise stores. The number ofprospective franchisees increased due to LAWSON’s stance of
supporting franchisees, and by matching this with an increasein vacant properties due to the impact of the COVID-19
pandemic, we were able to expand the number of our stores invarious regions. As of the end of 2020, we had expanded ouroperations to 12 provinces and cities, including new entry into
the Hebei and Hainan provinces. We have the largest numberof Japanese-affiliated convenience stores in China and ourentire China business has become profitable on an operating
income basis.

Overseas Business
China“Creating Happiness and Harmony
in Our Communities”— around the world.
We will align our business development tothe culture of each region.
Motonobu Miyake
Executive Vice President, China Business Division Director andLawson (China) Holdings, Inc. General Manager

Our Expansion in China
Lawson entered Shanghai in 1996, becoming the first Japaneseconvenience store to introduce the modern convenience store
model to China. During the 2000s, we were unable to establisha brand image due to sluggish growth in the number of stores
amid soaring rents and intensifying competition. In the 2010s,
however, we reconfigured our basic strategy for China. We
established a system for developing our own expertise and IT
and core infrastructure to adapt to changes in local culture andExpansion in China
Net sales (left axis)
Number of stores (right axis)(Millions of yuan)

Sales in FY2020
Number of storesin FY2020

6,487
3,256

million yuan
stores(Stores)

10,000

4,000

7,500

3,000

5,000

2,000

2,500

1,000

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(Fiscal year)

0

economic conditions. We then advanced our businessexpansion by sharing our accumulated expertise with our
subsidiaries and area licensees. As a result, we have gained
strong levels of recognition and brand reputation in various
regions, recording roughly tenfold growth in our net sales andthe number of our stores over the last ten years.

Overview of Fiscal 2020
In fiscal 2020, sales temporarily declined due to the impactof the COVID-19 pandemic. However, the recovery trend
started relatively quickly as case numbers declined. We thus
implemented a range of initiatives such as infection
prevention measures, strengthening support for franchisees,delivery services, and live commerce. We strengthened our
private brand products in China by locally manufacturing andselling product ranges that were major hits in Japan:
BASCHEE- Basque-style cheesecake, and Akuma-no-onigiri(“Devil’s Rice Ball”=rice ball too delicious to stop eating).
We also actively pursued collaboration around various types ofintellectual property, advancing a brand strategy aimed atpromoting purposeful purchasing inspired by a positive
association with LAWSON. Another key focus has been
digitalization. In addition to offering a variety of benefits throughour members-only smartphone app, we have started taking
advance reservations for pickup at designated stores. We have
LAWSONINTEGRATED REPORT 202130

 Strategies under Challenge 2025
As of the end of May 2021, we had 3,640 stores throughout
China. We are targeting 6,000 stores by 2022 and 10,000
stores by 2025. We have in place a system of accumulated
expertise, IT, and core infrastructure that enables us to maximize
growth of stores in each region in accordance with our China
basic strategy and to accelerate regional expansion. As brandrecognition of LAWSON increases in China, we have increasingly been approached by many regions about opportunities
such as market entry or licensing offers. There are increasing
possibilities for expanding new area licenses. The Chinese
government has made the modernization and expansion ofChina’s convenience stores part of its policy toward driving
growth in domestic demand and improving the lifestyles ofChinese people. However, the number of convenience stores
relative to the population is still relatively small in China
compared to Japan and other countries. We therefore see
considerable room for expansion in the future. There are also
many opportunities for area licensing and M&A given the large
number of local convenience stores in each region. China is avast country where cultural and economic levels vary between
regions. We will therefore start with our Chinese subsidiaries that
operate in each cultural zone as we aggressively expand ourbusiness in China. In doing so, we will contribute to the Lawson
Group as a whole.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Humankindness

We will drive forward with our challenges
based on diverse values, enabling our
employees to feel motivated in their workand creating happiness in the community.

Companywide
Transforming work motivation

Work motivation reform

Katsuyuki Imada
Member of the Board
Senior Executive Managing Officer
Corporate Strategy and Planning Division Director, – Human Resources,– New Business Division, and Executive Assistant to Deputy CSO (CSR Promotion)

The Talent Sought by Lawson
The kind of talent that we look for at Lawson is people who canthink and act on their own initiative. With more than 18,000
stores in Japan and overseas, each store has different products
to suit different customer needs, and many things happen everyday. For the headquarters to try to issue instructions for all ofthese details would be impractical and too slow. That is why weneed people who can understand our customers, our stores,
and shop floors—people who can think and act on their own
initiative. Our people need to have the awareness to actively
challenge themselves to seek better results, rather than
repeating the same thing day after day.
Just as our Three Promises advocate “Human kindness”
and “Environmental (Machi) friendliness,” the guiding
principle of our business is to work together with our store
owners and crew, and to live in harmony with the diverse
people of the world.

Strategies under Challenge 2025
The main objective of the Work Motivation Reform Project in
Challenge 2025 is to stimulate the growth of our Group by
fostering personal development and a sense of achievement
among our employees, empowering them to take initiative in
addressing challenges. To support this, the project aims toinstill a sense of trust and solidarity among the Group’s diverse
human resources.
Two measures to incentivize employees to embrace challenges
In addition to business improvements such as adopting online
communication tools and further advancing digital transformation in line with needs in the field, we have launched two
major measures to incentivize employees to take up challenges.
The first is a revision to our evaluation system. In a generalsystem that evaluates employees based simply on whether or
not they have achieved their goals, it is difficult to create aculture that encourages employees to strive for challenging
goals. We have therefore established a new “Challenge Goal”
category to evaluate employees for proposing their own goals
and targeting these as challenges.
The second is the “100 Million Yen Challenge”. We
solicited ideas for new challenges, allocating a budget of 100
million yen to be used for the selected project. We received
203 applications, including some from overseas. There weresales challenges aimed at increasing sales, but among the
LAWSONINTEGRATED REPORT 2021

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applications were ideas for initiatives that truly embodied asense of coexistence with society and respect for diverse
values. For example, there were proposals to create learning
opportunities for children who have been hospitalized for along time, or to decorate product packages with pictures
drawn by people with disabilities.
This project is itself being carried out by inviting
employees from all over the country to participate voluntarily.
Each employee formulates specific plans aimed at revitalizing
communication and improving work efficiency. One of theoutcomes of this project is the Lawson Lively Salon, across-departmental social event. This is an online salon
where five to six people from various departments, positions
and age groups, can ask each other questions and share
their views. This initiative provides an opportunity for
employees from all over the country who are not normally incontact with each other to inspire each other. It leads to newchallenges, while at the same time fostering an awareness ofdiversity and coexistence.
In traditional chain store theory, uniformity and standardization have been considered good. At Lawson, however,
we have a culture that values diversity. This is evidenced by
the variety of stores and brands we have developed,
including NATURAL LAWSON and LAWSON STORE 100.
By encouraging all our employees to “think and act on theirown initiative,” we drive the creation of synergies. In this way
we can move forward to realize our Group philosophy,“Creating Happiness and Harmony in Our Communities.”

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three PromisesCompanywide
Diversity and human resource development

Promotion of diversity and realization ofa work/life balance
Lawson promotes diversity with the aim of assembling
employees with widely varied values who join together andperform to their full potential to strengthen its franchise chain
further. We have constructed systems for promoting diversity
and inclusion under the direction of the President, establisheda special subsidiary to promote employment of people withdisabilities, developed childcare facilities in our workplaces,
and opened offices for conducting labor management
consultations with a focus on improving operating efficiency
and work environments.
In recruiting activities, we disregard gender, nationality,
age, school, and origin, focusing instead on individual
suitability, motivation, and ability. In our regular recruitment,
since 2005 we have targeted a 50-50 ratio of male and female
recruits, and from 2008 we have made a continued effort torecruit non-Japanese employees.
Diversity Promotion System

Proportion of eligible male employees
taking childcare leave(Persons)
91

160
80

Marketing Strategy
Division

Proportion of working mothers amongfemale employees

No. of male leave takers (left axis)
Proportion of eligible male employees taking childcare
leave (right axis)

President
Director, Human
Resources Division
Human Resources Division
Diversity Promotion Officer

94

92

Diversity TeamGenki Leader
Committee

No. of female managers (left axis)
Proportion of female managers among all managers(right axis)(%)(Persons)(%)(Persons)

100

300

30

150

(%)

24.5 24.2 24.4

80
75

70

9.5

22.2

21.2 21.9
120

Proportion of female managers among
all managers

No. of working mothers (left axis)
Proportion of working mothers among female
employees (right axis)

7.9

17.8

200

Marketing Team

childcare, long-term care and cancer treatment; established aremote work system for all employees; and introduced an active
full-time senior employee system, raising our employee
retirement age to 65 effective March 2021. These measures will
help transform Lawson into a company whose employees cancontinue working with satisfaction.
In other initiatives, the Sweeping Transformation
Executive Committee is examining or implementing various
initiatives to enable employees to continue working andgrowing energetically over the long term. These include
setting up a rewarding work reformation project, establishing
Challenge Goals, and driving digital transformation, as well as
vertical, horizontal, and diagonal communication strategies.
As a result of these efforts, Lawson was again selected
as a Nadeshiko Brand in fiscal 2020 (sixth time in aggregate).
Nadeshiko Brands are listed companies selected by the Ministryof Enterprise, Trade and Industry and the Tokyo Stock Exchange
for outstanding achievement in encouraging women’s successin the workplace.

In our desire to retain our female employees over thelong term, we have introduced such programs as careerdevelopment training, childcare leave training, and elective
leadership training to support young women in their career andlife planning. By fiscal 2030, we aim to achieve a 30% ratio of
female managers, and we are also taking step to develop
female management candidates in our Next-Generation
Development Committee, which aims to develop the next
generation of leaders for senior management roles from among
our general managers.
In 2014, Lawson introduced the short-term childcare leavesystem, in hopes of inspiring active male participation inchild-rearing and housework leading to efficient, highly productive
work styles among both men and women. The ratio of fathers
taking childcare leave reached 94% in fiscal 2020, indicatingthat this practice is taking root in Lawson’s corporate culture.
To promote active roles for diverse human resources, we
introduced a flexible full-time (limited work location) employee
system designed for compatibility with obligations such as

20

16.0

100

6.55

10.1

10.7

12

8.3

7.0

8

5.59
50

80

40

16

3.76

8.4

100

10

2.78

50

4

4.6

25

0.9

Operating under the President’s direction, the Human Resources Division takes
responsibility for system design, operations and appointments, while the Marketing
Strategy Division seeks to create new value from ideas generated by female employees.

0

23

93

94

109

111

133

117

2014

2015

2016

2017

2018

2019

2020

(Fiscal year)

LAWSONINTEGRATED REPORT 2021

32

10
0

0

23

67

107

128

151

182

202

219

211

2001 2005 2010 2014 2015 2016 2017 2018 2019 2020

8
0

(Fiscal year)

0

26

37

63

76

75

92 108 120 127 131

2001 2005 2010 2013 2014 2015 2016 2017 2018 2019 2020

0

(Fiscal year)

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three PromisesCompanywide
Occupational safety and health and productivity management

Human Resource Development

Occupational safety and hygiene

Guided by our Group philosophy, we operate a developmental
personnel system aimed at encouraging every employee to think
and act on their own initiative. As part of this, we use two
evaluation systems: the Employee Behavior and Skill Level
Evaluation, which evaluates the employee behaviors (processes)that produce positive results; and the Performance Evaluation,
which assesses the results of the behavior.
We also support individual career development and growththrough career development interviews, and have adopted afree agent (FA) system designed to enable employees to take on
ambitious goals toward their career development.
We are building a system for motivating employees andimproving the overall performance of Lawson. We aim to drive
business improvements and innovation by encouraging staff toavoid allowing their thinking to become constrained by theboundaries of their own role, instead adopting a company-wide
perspective. Key initiatives in this area are the Lawson ChallengeAwards, an internal award system for employees who voluntarily
take on challenges and bring about improvements in their workand business performance, and the 100 Million Yen Challenge,a plan submission program.

We have established a labor-management consultation forum
that emphasizes thorough discussions aimed at improving
employees’ operational efficiency and work environment. We arecontinuing our efforts to create a comfortable workplace,working to improve the work environment through employee
participation in areas such as reforms to our organizational
culture and the use of systems. In each area, both labor andmanagement conduct self-checks of the work environment
before holding discussions to identify problems at an early stage
and resolve them quickly.
We ensure that the 5S Methodology of “Sort, Set, Shine,Standardize, and Sustain” is fully implemented by our franchise
stores in accordance with procedures clearly specified in ouroperation manuals. We also hold safety management meetings
Companywide to raise awareness concerning driving safety
among store supervisors and others whose jobs involve driving.
When a serious work-related accident occurs, we investigate
and analyze the cause and share our findings internally with theaim of preventing recurrence.
Also, in the area of work environment improvement,
we focus on such mental health monitoring activities aspresentation of improvement points and stress check
results for the various departments.

Health and productivity management

The President joins participants in a selective training session forfemale employees

and lead efforts to reinforce and direct health initiatives andhealth management for the Company and its customers. Since
September 2018, we have been working to strengthenGroupwide health promotion measures in cooperation with theLawson Group Health and Wellness Promotion Center, a bodyoperating under the direct supervision of the President, the
Human Resources Division, the labor union, and the Lawson
Health Insurance Society.
Promoting the health of its franchise owners is anotherimportant concern for Lawson. The various health preservation
programs provided through the Lawson Owner Welfare
Association (see page 40) include a subsidy plan for medical
examinations and operation of a health support desk.
As a result of these efforts, Lawson was selected as a
“Health and Productivity Management Brand 2021,” its fourth
time to receive this recognition. In addition, the Company was
selected as one of the “Health and Productivity Management
Outstanding Organizations 2021,” an award that honors
corporations for excellence in health management, based on ourefforts to address local health issues.
Health andProductivity
Management
Promotion System

Health and Wellness
Promotion
Committee

CSO (President)
Assistant CSO (Chairman,
Lawson Health Insurance Society)(Supervising industrial physician)

Human
Resources
Division

As a company that contributes to customers’ overall health,
Lawson places paramount importance on the health of ouremployees as well as the owners and crews of franchise stores.
We announced a health declaration to this end in 2013. With the
President serving as Chief Sustainability Officer (CSO) and
Chairman of the Health Hub Promotion Committee, we haverecently established a system to promote health management
LAWSONINTEGRATED REPORT 2021

33

Conducting interviews with industrial physicians andpublic health nurses to support employee healthLawson Group
Health Promotion
CenterLawson Health
Insurance
SocietyStrategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three PromisesCompanywide
Social Initiatives

Dealing with the impact of the COVID-19
pandemic
All of us at Lawson are working to protect everyone in ourstores from infection by the COVID-19. We are also conducting
various activities to support people who are facing difficulties
day after day.
Initiatives for medical professionals
To support medical professionals working on the front lines of
medicine, on certain days between April and June 2020 ataround 300 Hospital LAWSON stores in 47 prefectures
throughout Japan, we offered a half-price sale on all Uchi CaféSWEETS original desserts and small size coffee from the MACHI
café in-store freshly brewed coffee service. In May, we gathered
messages in support of medical professionals through Lawsons’official social media accounts and incorporated them into a
poster thanking everyone working at hospitals, which was thendisplayed at our stores.
In other efforts, in April 2021 we started a program ofdonating original processed foods that had passed their delivery
deadlines at our logistics centers. In May 2021, we started adonation drive linked to sales volumes of MACHI café, donating
4,646,827 yen to the Japanese Nursing Association. We havereceived messages of gratitude from medical professionals forthis support.

Vaccination booking consultation services
In May 2021, we provided consultations on COVID-19 vaccine
bookings at some of our Care-focused LAWSON stores (storeswith nursing care consultation counters and salon services) as
an initiative to dispel anxiety among local residents.
Support for producers and use of locally
produced ingredients
We are supporting producers by developing products that use
ingredients whose consumption is in decline. For example,at Lawson Stores in the Chugoku
and Shikoku area (1,477 stores asof end of August, 2020, excluding
some areas of Shimonoseki City,
Yamaguchi Prefecture) welaunched Mixed Rice with Red Sea
Bream (Kinshari onigiri rice balls)
using farmed red sea bream from
Mixed Rice with Red Sea Bream
Ehime Prefecture.

Delivery service
In August 2019, Lawson became the first convenience store
operator in Japan to introduced Uber Eats.*1 Responding toa surge in demand for deliveries associated with the spreadof COVID-19, we introduced foodpanda*2 in November
2020 and Wolt*3 at NATURAL LAWSON in April 2021,
bringing delivery services by the three providers in total to1,893 stores in 30 prefectures. In February 2021, we started
the first pharmaceutical delivery service in Japan with Uber
Eats, now operating at 25 stores (as of July 1, 2021).
Items handled: *1 Approximately 370 items *2 Approximately 400 items*3 Approximately 400 items(Kinshari onigiri rice balls)

Delivering the taste of a specialty store,
expanding collaboration with restaurants
As people stay at home and adopt new lifestyles, we arecollaborating with 35 famous restaurants throughout Japan todevelop products under their supervision, such as a Beef Stew
Rice supervised by Yoshikami and Hayashi Rice Gratin
supervised by RESTAURANT TAIMEIKEN. Using our nationwide
network of approximately 14,500
stores as a new sales channel, we
aim to bring cheer to local
neighborhoods through the great
taste of specialty stores.

Donation presentation ceremony (Japanese Nursing
Association)

Beef Stew Rice supervised by Yoshikami

LAWSONINTEGRATED REPORT 2021

34

Uber Eats

Wolt

foodpanda

SMARI box
SMARI box is a socially distanced package shipping service
that permits customers to return rental or e-commerce
products without conducting shipping or acceptanceprocedures at the store counter. As of July 2021, the service
was introduced at approximately 3,000 stores in the Kanto,
Kansai, and Chukyo areas. Users of the Japan
Post’s e-shipping service that enables sellers
using flea market apps to ship products
can also deposit items at stores withdedicated SMARI boxes, reducing thetime spent waiting at the store counterto conduct sending procedures.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Community Happiness donation activities
The Lawson Group conducts social contribution activities torealize the concept of “Aiming to create a better future forchildren.” As part of these, we established the Lawson Group’s“Happiness in communities” Fund-raising Campaign, which
supports donations and activities for three organizations. We
also pursue activities such as measures to prevent COVID-19
infections and accept donations for emergencies such as
earthquake and torrential rain disasters as needed.
A total of some 10 billion yen (as of end February 2021) has
been collected since September 1992 through in-store donation
boxes and Loppi multimedia terminals, and from Ponta pointand d-point donations.

Donation boxes atcash registers

Support Dreams Fund (Scholarship program for children
from single-parent families)• Organization receiving donation: National Federation ofSingle Parents and Children’s Welfare Associations in Japan
This scholarship program was established to provide support tochildren in single-parent families who wish to realize their
dreams. The program provides 30,000 yen per month to 400
students from the third year of junior high school to the thirdyear of high school throughout Japan. In addition to scholarshippayments, the program also supports the children throughlearning support and experience programs.

Lawson Green Fund• Organization receiving donations: The National Land
Afforestation Promotion Organization
We support school afforestation activities conducted inprimary/junior high schools and special needs schools
throughout the nation, and also support forest improvement
projects led by voluntary organizations. The number of projects
joined by franchise owners and others is 1,611 as of the end of
February 2021.

LAWSONINTEGRATED REPORT 2021

35

“Dream Classes” Fund•O
 rganization receiving donations: Public interest
corporation: Japan Football Association
We support the “Dream Classes” where athletes talk to children
about the importance of having a dream. The classes started in
2019, and in fiscal 2020 we held 42 classes at 22 schools,
reaching approximately 1,260 students. The classes were held
online in order to prevent infection.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three PromisesCompanywide
Health initiatives

Initiatives on healthful foods
The Lawson Group is developing a range of initiatives in
response to increasing health awareness among customers. In
2001 we launched NATURAL LAWSON, which has served as alaboratory for developing health-conscious products that havebeen sold at LAWSON stores nationwide.
Sales of these healthful products represented roughly 20%
of our total food products in fiscal 2015, growing significantly toaround 30% of total food products in fiscal 2019, as they foundstrong support among customers. In fiscal 2021, we will work to
expand them even further.
Three essentials of development for healthful foods
Product development and sales are focused on three essentials
for solving customers’ lifestyle issues (low carb, low salt, andprotein intake), and aiming not only at reducing calories and salt,
but also making products that taste even more delicious.

Product development targeting deliciousness and health
Our bran bread, onigiri rice balls with sticky barley, andsmoothie series have been widely popular among customers,such as those concerned with sugar intake. Repeatedrenewals of such products from the initial development stage
have won wide support.
In terms of salt content, we are working to develop new
expertise and technologies to maintain superior taste bybringing out the delicious flavors inherent in the soup stock,other ingredients and seasonings. Health conscious frozen foodproducts with clearly labeled dietary fiber and carbohydratecontent are also popular. We also sell food products that use
soy meat to supplement protein shortfall as needed.
Furthermore, over the past few years, we have taken up
the challenge of changing the common view of convenience
store foods. We have been working on not using salt andchemical seasonings and reducing calories in dietary staples.
During the COVID-19 pandemic, a decrease in opportunities forgoing outside led to an increase in stress and lack of exercise incustomers, We are therefore focusing on developing productswith a greater emphasis on protein to help people build muscle.

• Skipping breakfast • Lifestyle diseases (excessive carbohydrateor salt consumption) • Needs for healthy life extension
Lawson’s Three Essentials for Health30% (max.) reduced saltcontent centered on main
normal diet staples

Low carbs

Use of bran (grain husks) tocontrol carbohydrate intake

In its efforts to assure LAWSON
stores a stable supply of vegetables
and fruits that support the healthyeating habits of our customers, theLawson Group has established
LAWSON Farm, a corporation
eligible for farmland ownership withmember farms at 17 locations nationwide. LAWSON Farms
employ the Nakashima method of farming, which involves
conducting soil diagnoses to develop ideal soil for growing
crops before planting and supplies appropriate nutrition
according to the growing conditions to produce healthy,
delicious vegetables and fruits. We are also working tosatisfy the GAP (JGAP, ASIAGAP)* guidelines for sustainableagricultural production through efforts in the areas of quality
improvement, food safety and environmental protection.
* GAP: Good Agricultural Practice (agricultural production process management).
LAWSON Farms accorded GAP certification have attained the Japanese JGAP
standard or international ASIAGAP standard.
Please refer to the link below for details.
https://www.lawson.co.jp/company/activity/lawsonfarm/

Lawson’s Three Essentials for HealthLow salt

LAWSON Farm

Protein fortification

History of initiatives for healthful food
From 2015

From 2018

From 2020

From 2021

Low carb

From 2012
Dietary fiber

Vegetables

Vegetables

Low salt

Low carb

Bran bread

Onigiri rice balls withsticky barley

Smoothie series

Motto! Yasai (“morevegetables”) series

No added salt

Expand to dietarystaplesSteamed chicken breast,
high in protein

LAWSONINTEGRATED REPORT 2021

36

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience Store Business
Health initiatives

NATURAL LAWSON

Care-focused LAWSON stores with nursing
care consultation desks for seniors

In July 2021, NATURAL LAWSON marked its 20th anniversary
as a nearby store supporting “beautiful, healthy andcomfortable” lifestyles with 143 stores nationwide as of theend of February 2021. With a focus on “supporting healthand beauty,” “seasonality,” and “safety and reliability,”
NATURAL LAWSON offers a unique and carefully selected
lineup of environmentally friendly daily products such asdetergents and cosmetics and food products that aredelicious and healthy while also offering great value.
Moreover, as part of our initiatives to reduce plastic, inaddition to our previous detergent range, in February 2021
we launched sales by weight of hand soap, shampoo, andsimilar items, and also started sales by weight of dry fruits
and nuts at some stores from July. In addition, in August
2021, we ran a demonstration experiment at some stores,
in which we swapped plastic-wrapped disposable chopsticks
and plastic spoons, usually supplied free with productpurchases, for paper-wrapped disposable chopsticks andwooden spoons.

Health consciousness has been
advanced through the operation ofCare-focused LAWSON stores offering
consultations by counselors such ascare managers at permanent nursing
care consultation desks and productsthat support seniors and their families.
We also use their community salonsas regional bases for multi-generational interaction to hold healthassessment meetings, “Orange Café”
dementia caregiver training courses
and other events related to health andpreventative care. In May 2021, we
conducted consultation services
regarding COVID-19 vaccination
bookings at some stores.

*As of the end of July 2021

Nursing care consultation desk at a
Care-focused LAWSON

Consultation meeting regarding
COVID-19 vaccination bookings

Health-care focused stores and stores sellingover-the-counter pharmaceuticals

20th anniversary commemoration product:“Tomato Burger”

Fixtures for sales by weight
Chilled udon with Awaji Island
onions and thin-sliced pork

We are expanding the number of stores that sell over-the-counter
pharmaceuticals and prescription drugs through partnerships
with dispensing pharmacies and drug store chains, and trainingof registered sales personnel. We also continue to open
healthcare-focused stores offering a wider assortment ofcosmetics and daily necessities than ordinary LAWSON stores.
At some stores equipped with drug-dispensing pharmacies, weare trialing online drug administration guidance and receipt ofprescriptions. In addition, from February 2021, we started thefirst deliveries of pharmaceutical products using Uber Eats inJapan at some of our stores handling over-the-counter
LAWSONINTEGRATED REPORT 2021

37

pharmaceuticals. This service handles 52 types* of Type-2 andType-3 OTC drugs including cold medicines, eye drops, andstomach medicines. The service meets the needs of customers
who want to purchase medicine without going outside.

Hospital LAWSON (in-hospital)
convenience stores
Lawson has responded to
the needs of hospitalpatients for convenience
stores by proceeding toopen Hospital LAWSON
convenience stores in
hospitals, and is now No. 1
for the number of convenience stores in hospitals. Besides
regular products and services, Hospital LAWSON stores featurea lineup of products designated by hospitals. We also cooperatewith individual hospitals in developing customized stores andservices such as hospital wagon sales. Recognizing the hospital
as a community in its own right, we seek the daily happiness ofevery hospital patient by giving careful consideration to theirdetailed needs.
Ratio of stores in hospitals by convenience store chain*
Lawson45%
Other chains55%* Research by Lawson (as of theend of July, 2021)

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience Store BusinessSupport for franchise storesSupporting franchise store management
and reinforcing trust
Lawson’s closest, most strategic partners are the franchiseowners and store crews who serve customers on the forefront
in communities throughout Japan. Strengthening the trust
between franchise stores and Lawson and aiming to have stores
become a “Hub of refreshment in every community” that isessential for customers and the local region are important forrealizing the Group’s Corporate Philosophy, “Creating Happinessand Harmony in Our Communities.” Lawson is using digitaltechnology to reduce the need for staff and labor in store
operations, while headquarters contributes by supporting
franchise store recruitment activities and optimizing their benefit
packages, as well as by reinforcing various initiatives andsystems to encourage sound store management through clear,
open communication.

Regional
societyAbundant
product
lineupSocialcontribution
activities

Franchise
stores

New services
development

Joint business
operations

LawsonHeadquarters

Furthermore, Lawson has a strong focus on increasing
franchise store profits, and to ensure that every Lawson
employee works more responsibly than ever before to achievethis, from fiscal 2020, the Company’s overall management target
was changed from sales to franchise store profits, and the key
performance indicator (KPI) for employee bonuses was changed
to franchise store profits. For stores that have suffered fromsharp declines in customer numbers and sales due to the
COVID-19 pandemic, headquarters is providing management
support tailored to individual stores to support stable operations.
Recommending and supporting multiple store operations
Lawson recommends, moreover, that its franchise owners
operate more than one store. This enables them to spread therisk posed by the emergence of new competing stores, so thatthey can maintain stable management while expanding theirbusiness more easily than when operating a single store. A key
aspect of multiple store operations is the development of store
managers who can be relied upon to manage store operations
in place of the owner. From fiscal 2020, Lawson has started the
support for store manager training, in which Lawson trainers
visit individual stores to provide on-the-job (OJT) training todevelop the skills of store managers at franchise stores.
As of the end of February 2021, the multiple store ratio
stood at 76.1%, while the multiple store ownership ratio was
45.5%.

Environmental
activities

LAWSONINTEGRATED REPORT 2021

38

Multiple store ownership ratio *As of end February 2021
(%)
50

40.8

42.3

2016

2017

44.7

44.8

45.5

2018

2019

2020
(Fiscal year)

25

0Multiple store ratio *As of end February 2021
Single store

23.9%

Multiple stores

76.1%

Management Owner (MO) system
Lawson has established the Management Owner (MO) system
to support franchise owners who open additional stores basedon a reinforced partnership with the Company. The MO system
is making a substantial contribution to the progress of the
LAWSON chain as a whole, not only by enhancing the brandimage of the Lawson chain through development of model
stores and sales floors, but also by providing a platform for MOs
to exchange opinions or propose improved work procedures toheadquarters management personnel as representatives of the
franchise stores in their region. As of end February 2020, there
were approximately 190 MOs operating stores in various regionsof Japan.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Multiple store ownership andthe Management Owner (MO) system

Average No. of stores managed: 11

Safe management by stores with visible performance results

Average No. of SCs: 2

Role of theManagement Owner(MO)

Businessmanagement

SCSC(store consultant)(store consultant)

Making rounds and providing
guidance to individual stores

Making rounds and providing
guidance to individual stores

Existing stores

Existing stores

Directly managed
storesChange in format

Older franchise
stores (Stores with
expiring contracts)

New franchise
store owner
Initiation ofbusiness

Pre-existing
managementbase

Confirmation of the candidate’s intention to undertake management
before completing a new property contract
OPEN

MultiplestoresMultiplestoresSingle store

Owner + 3 store managers
Average number of crew at 4 stores
Approx. 60

Owner + 1 store manager
Average number of crew at 2 stores

Headquarters
Selection of newstore property
candidates

Existing franchise stores
Confirmation of intention
to undertake
management

Headquarters
New property
contracts

Open

Approx. 30

Owner
Average number of crew
Approx. 15

Considerations when entering a franchise contract
With regard to franchise store contract matching, as a rule,potential new franchise owners are introduced to existing stores.
For existing franchise stores owners, after confirming theirintention to undertake management, we proceed with contract
signing and opening of the new property. Furthermore, fromfiscal 2020 we created a new 5-year contract package as an
option for those who feel less confident about signing up for the
existing 10-year franchise contract.

Communication to build strong partnerships withfranchise stores
Lawson has established a number of systems aimed atstrengthening its partnerships with franchise stores by enabling
members of the Board of Directors, including the President, tocommunicate directly with franchise stores. We place special
value on feedback from our franchise stores, which operate indirect contact with customers, and seek to achieve mutual
consideration and mutual prosperity with them through close
communication. In fiscal 2020, we
have taken such measures as achange to online meetings toprevent further spread of
COVID-19.
Lawson Seminars

LAWSONINTEGRATED REPORT 2021

39

Lawson Seminars (convened twice annually for
all franchise stores)
The President and other members of management share theCompany’s policies and directions with the franchise owners byproviding them with detailed explanations of future businessstrategies, and informing them of product development planningin conformance with the policies.
Area meetings (convened monthly at branch offices
throughout Japan)
Franchise stores from the same areas gather to share details ofsales activities planned for the following month as well as of theirpast successes, or to exchange opinions with the aim of helping
individual stores improve their management capabilities.
Lawson Owner Welfare Association board meetings(2 times/year)
Meetings of Headquarters executive officers and representatives
selected from among franchise owners in each area convene
twice a year. Organized to provide franchise owners with
opportunities to exchange opinions with Headquarters, themeetings are attended by the President and other members of
Lawson’s Board of Directors, who join in discussions covering a
range of issues.
MO General Assembly (1 time/year)/MO Executive Committee
meeting (2 times/year)
Lawson’s management owners meet regularly with headquarters management to exchange opinions as representatives of
their regional franchise stores in accordance with Lawson’sGroup-wide practice of participation in management.
Lawson Owner Hotline (as needed/available to all
franchise stores)
In July 2019, Lawson established a system of both internal andexternal telephone consultation contacts (in law offices) toenhance communication with franchise owners.
We also provide for direct communication with the
President (as needed) and conduct questionnaire surveys atmember stores (once a year).

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Supporting work style reforms
Owner support system
From September 2020, we deployed around 60 Lawson staff ateight offices nationwide to support franchise store owners intaking leave.
One-time personnel recruiting service “matchbox”
From April 2021, we introduced the one-time personnel
recruiting service “matchbox” provided by our affiliatecompany, Lawson Staff Co., Ltd., for LAWSON storesthroughout Japan. Stores can advertise online for people to fillopen shifts, and registered job seekers canapply to stores that suit their conditions,allowing stores to select personnel. The service
has been highly beneficial to franchise store
owners seeking to find workers for shifts during
times when they are short staffed, or to fillsudden absences.
Promoting the use of learning tools
for beginners
We have created a learning tool called “Starting Work at
Lawson” that contains all the operations that need to be learned
by new crew members (part time) when starting the job. This
tool enables them to quickly learn about things such as basic
store rules and how to serve customers
at the register. We have also heldcourses on how to train new crew
members for franchise store owners,
store managers, and crew leaders whoneed to provide the training, as well as
learning tools for non-Japanese crew
members. Our goal is to enable crew
members to enjoy working at the samestore for a long while.

Lawson Owner Welfare Association
The Lawson Owner Welfare Association provides franchise
stores with benefits embodying the three principles of “comfort,”“health” and “peace of mind.” The wide range of benefit
packages includes various allowances, mutual aid andcompensation for franchise owner members and their families
as well as for store crew and staff members.

Franchise store SDGs award
The Lawson Group is encouraging franchise stores to engage ininitiatives for the UN Sustainable Development Goals (SDGs)
through the building of strong relationships between Lawson
Headquarters and franchise stores. We also hope that these willlead to contributions to local communities.
Since fiscal 2020, Lawson has held the “Franchise Store
SDGs Awards” to foster understanding of the SDGs among
franchise stores and to increase their motivation. We call for
examples of “activities to bring happiness to the community”
undertaken by stores and present awards for the initiatives of 10
stores judged by a panel of Lawson’s corporate officers.

Examples of franchise stores SDGs Awards• Providing safety support on pedestrian crossings and periodic
rubbish clean-up around the state highway• Handing out coloring in sheets in the store and presenting
children who participate with croquettes or bubble sets
• Twice weekly mobile sales at a facility for elderly residents,and hearing their requests• Hosting junior high school students for work experience andconducting visiting lessons at the school• Washed and donated approximately 2,000 MACHI café milk
packs to an elementary school• Clean up activities in the shopping district and provision of
guidance on illegal signage and preventing abandoned
bicycles• Visiting lessons at elementary schools to teach about Lawsonsocial contribution activities and environmental issues, hosting
store visits, for seventeen years• Daily morning clean-up of the area around the store andparticipation in regular clean-up of the local shopping district• Ongoing support for local children’s club, including donationsof rice balls and original sweets• Mobile sales to areas with poor shopping access, such as
construction sites and areas near the mountains

LAWSONINTEGRATED REPORT 2021

40

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three PromisesCompanywide
Developing and operating a supply chain with consideration for society (human rights, etc.) and the environment

Respecting human rights and the naturalenvironment by using coffee beans from
Rainforest Alliance certified plantations

plantation. For example, more than 160 honeybee hives havebeen set up to promote pollination of various native plants
and increase biodiversity.
*Not applicable to the single origin or decaffeinated series.

Lawson is working to improve the lives of people involved in the
production and processing of raw materials. We are also
working to develop a sustainable supply chain that takes natural
resources and the environment into consideration.
For our MACHI café in-store freshly brewed coffee service,
we use only coffee beans from Rainforest Alliance certified
plantations.* This certification is awarded to farms that use
sustainable farming methods to meet rigorous environmental,social and economic standards.
At the Ipanema plantation in Brazil, where we procure
our coffee beans, we are working to improve the working
environment for plantation workers and support the educationof the children. We are also working to protect the lush
greenery by creating a nature conservation area within the

Increasing our use of FSC®-certified products
We promote the use of products, containers, and packaging
made from raw materials that have the FSC® certification, astandard for responsible forestry. We use these materials in
paper cups, paper plates for original products, and paper packs
for beverages. We plan to expand our use of environmentallyfriendly and sustainable options in our product offering and in
our raw materials procurement.

Lawson has been conducting corporate activities with arespect for human rights based on the Lawson Group
Corporate Conduct Charter and the Lawson Group
Transaction Policy. To promote the efforts to achieve theSDGs and ESG-focused management even more, on June
16, 2021, the Board of Directors established the Lawson
Group Human Rights Policy. As well as respecting humanrights in its own business activities, Lawson expects all
stakeholders to agree to this policy, and will engage indialogue and consultation toward ensuring respect forhuman rights.
Lawson Group Human Rights Policy (excerpt)

Main FSC®-certified products

For more information:ra.org/en

Environmentally friendly paper cups

We provide a comfortable working environment
for workers.

Lawson Group Human Rights Policy

Prisma Pack Natural Lawson Mixed
Vegetables and Fruits

1. R espect for human rights: the Lawson Group’s stanceand the expectations of our stakeholders
2. K ey themes of human rights(1) P rohibition of discrimination(2) P rohibition of child labor(3) P rohibition of forced labor(4) A ppropriate wage payment and appropriate
management of working hours(5) E qual employment opportunities(6) P rotection of workers and prohibition of harassment(7) R espect for personal information and privacy
3. C onducting human rights due diligence
4. R esponding to consultations and reports; resolving andcorrecting problems
5. P romotion of human rights-related education andawareness-raising
6. Information Disclosure
The full text of the policy is available at the following link.
https://www.lawson.co.jp/company/corporate/system/respect/More than 160 beehives have been set upon the plantation.

LAWSONINTEGRATED REPORT 2021

41

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises
Environmental(Machi)friendliness

Goal for 2030
(KPI)

Companywide
Reduced CO2 emissions

CO2 emissions per store

Reduction of 50% from 2013
(Target revised upward in June 2021)

Surprise ‘Whew!’ kindness project
Lawson started the “Surprise ‘Whew!’ kindness project: in July
2020, aiming to contribute to the vision of the SDGs bypromoting initiatives for solving environmental issues, such as
CO2 emissions, food waste, and reducing plastic fromcontainers, packaging, and shopping bags. We have set targets(KPIs) for 2030 and 2050.

Introduction of CO2 refrigeration systems
Lawson started installing highly energy-efficient CO2 refrigeration
systems in 2010. Approximately 4,200 stores have installed thesystems (as of the end of March 2021). These systems use CO2
refrigerants whose impact on
global warming is said to besmaller than that of CFCs,
and therefore can materiallyreduce greenhouse gas
emissions. Also, they arevery energy-efficient.
CO2 refrigerant cooling/refrigeration system

Reduced CO2 emissions
In April 2021, the Japanese government revised its targets forgreenhouse gas (GHG) reduction upward, changing it to a 46%
reduction compared to 2013. Lawson has followed suit, revising
its 2030 target for reduction in CO2 emissions per store upwardfrom a 30% reduction from 2013 to a 50% reduction from 2013.
To achieve this target, we are working to reduce electricity
consumption in stores, with initiatives such as introducing
energy-saving refrigeration systems, upgrading to the latest air
conditioners and LED lighting, and promoting the “TenEnergy-saving Rules” in stores.

Implementation of “Ten Energy-saving Rules”
at the stores
Lawson has established the “TenEnergy-saving Rules” to improve theoperational efficiency of in-store refrigeration
and air conditioning systems, and reduce thetotal amount of electricity used. Based onthese rules, we perform maintenance duties
such as adjusting the set temperature, andcleaning filters at each store.

CO2 emissions generated by our supply chain
for fiscal 2020
CO2 emissions in total Approx. 5,301.9 thousand tons
Method of calculating greenhouse gas emissions in the supply chain
Calculated from the Database of Emissions per Base Unit Ver.3.1,
based on the Basic Guidelines on Accounting for Greenhouse Gas
Emissions throughout the Supply Chain, Ver.1.0, explanations byindustry (retail industry).
Category
Scope 1
(Direct emissions)

Scope 2
(Indirect emissions)

Scope 3(Other indirectemissions)

Emissions covered
Gasoline consumption ofcompany vehicles
Electricity consumption of theheadquarters, regional offices,branches, and companyoperated stores

42(Thousandt-CO2)

4.3

980.7

Raw materials purchased (Private
and national brand products,
plastic shopping bags, etc.)

4,025.7

Electricity consumption
associated with procurement ofelectric power

144.9

Energy consumption of thedelivery centers

101.0

In-store waste, and industrial
waste due to store closures andremodeling

20.6

Business travel of Lawson
Headquarters employees

0.9

Disposal of containers,
chopsticks, and plastic shopping
bags

23.8

Total

LAWSONINTEGRATED REPORT 2021

Emissions* Does not cover all of Lawsons’ supply chains
Scope 2 is the sum of electricity use at stores from fiscal 2020

5,301.9

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three PromisesCompanywide
Reduced use of plastics and food loss

Reduced food loss

Reduced use of plastics
Plastic containers and packaging
Goal for 2030
(KPI)

Reduction of 30% from 2017

(Adoption of original product packaging using 50%
eco-friendly materials)

Reducing plastic use for packaging
We strive to replace plastic packaging items with paper ones,
and reduce the volume of plastic waste while retaining the taste
and quality of our original products. Also, we are committed toreducing plastic use by utilizing plastic packaging items partly
made from plant-derived materials.
MACHI café

Changed to paper material for all iced coffee cup
sizes: S, M, Mega
• Changing cup material from plastic to paper, expecting to
reduce plastic use by approximately 2,165 tons per year
• Switching to lids with a sip-thru hole that allows customers
to drink their beverages without the need for a straw

Using paper containers for certain Machikado Chubo in-store
kitchen offerings and the “Choi” series of small-volume
boxed meals• Changing rice bowl-type boxed lunch containers
to paper containers, expecting to reduce plastic
usage by approximately 250 tons per year
• Using paper containers for the small-volume
type “Choi” series of cooked noodles and chilled
boxed meals

Changing the wrapping materials for rice ball products•T he specifications of plastic materials have been changed for thewrapping of all hand-rolled rice ball products, andsome directly wrapped rice ball products and riceball products sold with other products in a bundle.
Some of the wrapping has been changed toplant-derived materials, and the thickness of thewrapping sheet has also been reduced.

Sales by weight – a new initiative at NATURAL LAWSON• Some NATURAL LAWSON stores have been trialing
sales by weight, enabling customers to buy just theamount they need, in the container of their choice.
This initiative not only helps to reduce plastic
containers used in conventional products, but also
suits people who want to try a small sample.
• In addition to daily necessities such as detergent(from August 2020) and shampoo and body soap
(from February 2021), we have now also started
sales by weight for food such as dried fruit and nuts
(from July 2021).

Started demonstration experiment of PET bottle reduction andrecovery machine in collaboration with the Kirin group• In collaboration with Kirin Holdings Company,
Limited and Kirin Beverage Company, Limited, in
July 2021 we started a demonstration experiment
for recovering used PET bottle containers at
LAWSON Yokohama Shinkoyasu Store, aiming topromote PET bottle reuse and recycling. Recovered
PET bottles are collected using the vending
machine operation route of Kirin Beverage
Company, Limited, to achieve more efficienttransport and reduce environmental impacts suchas CO2.

Charge for plastic shopping bags
• Effective July 1, 2020, it became law for stores to charge for plastic
shopping bags in order to help preserve the global environment.
Accordingly, in addition to charging for shopping bags, Lawson is
producing bags with a mix of approximately 30% plant-derived materials
to reduce the use of plastics. The shopping bag refusal rate at the endof February 2021 had reached 74.9%. In addition, part of the proceedsfrom shopping bag sales at directly operated stores was donated in theform of rice to Food Bank Japan Promotion Group as an initiative toprovide food support for children.

LAWSONINTEGRATED REPORT 2021

43

Goal for 2030
(KPI)

Reduction of food waste by 50%
from 2018 level

Donating the surplus stock of original products ona regular basis
Since August 2019, Lawson has periodically donated to theJapan Food Bank Promotion Group original sweet products,
processed foods, etc., that missed the delivery deadlines*.
During the Christmas season in December 2020, we expanded
this activity to include chilled products such as Christmas cakeand hamburg steaks. We have also expanded the scope ofrecipients for these donations. In addition to the Bunyko-Ward“Kodomo-Takushoku” children’s food delivery program, from
December 2020, we have been supporting Kodomo-Takushoku
operators throughout Japan through the supporting organization, Kodomo-Takushoku Ouen Dan. As a new initiative, we also
tried distributing free coupons for boxed meals to users of theservice that can be redeemed directly at stores. In fiscal 2020,
we delivered a total of around 270,000 products to needyfamilies through these organizations, as well as to Children’s
Cafeterias, orphanages, and facilities for people with disabilities.
* Food products are delivered for donation much earlier than their best-before dates.

Recycling of unsold food
The daily volume of unsold food products at Lawson stores is
5.5 kg per store, along with 2.4 kg of food oil (oil waste) used fordeep-fried food products. In order to reduce food waste, we
optimize order volumes and offer discounts to promote thecomplete sale of all stock. We also deliver unsold food products
to recycle plants to have them recycled into animal feed forswine or poultry, or fertilizer. Oil waste is also recycled as anutritional additive for animal feed, biodiesel, etc.

Strategy for Creating Happiness in Our Communities

Strategy for Creating Happiness through the Three Promises

Domestic Convenience Store Business
Regional cooperation

Comprehensive agreements with local
governments and administrative services
Comprehensive agreements with local governments
Having concluded comprehensive agreements with local
governments throughout Japan, Lawson is collaborating withthem in programs aimed at revitalizing local communities andcreating community environments in which everyone can lead a
comfortable life.
As of the end of June 2021, we were cooperating with 65
local governments (45 prefectural and 20 municipal
governments) in a wide variety of projects. The list includes
welfare and childrearing support, such as provision of hot water
for baby milk, product development leveraging use of local
specialties and seasonal ingredients, crime prevention activities,
environmental improvement through greening and cleaning
activities, provision of supplies and support for people who are
stranded away from home during disasters. In addition to allthese, some stores have formed tie-ups with local governments
to serve as antenna shops to promote recommended local
products and provide tourist information.

Administrative services available at Lawson

Participation in safety station activities

Customers can get various forms of government-issued
documents with the My Number Card, or Basic Resident
Register Card at Lawson stores throughout the country.
Currently, this service is available in 858
cities, wards, towns, and villages (as ofAugust 10, 2021). The in-store
multi-functional copier can be used toprint out copies of residence certificates, seal registration certificates, tax
payment certificates, family register
certificates, copies of supplementaryfamily registers, etc.*

The convenience store industry has faced a growing number ofdemands from society in recent years for actions ranging from
crime prevention and disaster response and safety measures tosupporting the sound, healthy development of young people.
The Lawson Group is responding by participating actively in
the Safety Station activities (SS activities) of the Japan Franchise
Association, cooperating with efforts to implement safe, securecommunity development, and working to ensure a wholesome
youth environment. We are also taking measures to prevent
robbery and special fraud, protect women and children who feelthreatened, and safeguard confused elderly residents who
wander away from home. Lawson’s pursuit of these efforts
earned commendations from local police
for 733 instances of special fraud
prevention at its stores in fiscal 2020.

* The public services available at Lawson stores vary depending on the local municipality

Promotion of mobile sales
We visit facilities for the elderly, companies, and factories tosell food and daily necessities, to reach customers who
cannot easily visit our stores. In cooperation with local
governments, we also provide mobile shopping services toremote areas, as well as a “community watch service” inwhich we check in on the elderly.

Stores with antenna shops for local governments

LAWSONINTEGRATED REPORT 2021

44

Incidents in 2020
Sheltering women from potential threats

1,353 stores

At least 1,999
instances

Sheltering children from potential threats

707 stores

At least 1,013
instances

Safeguarding seniors

2,615 stores

At least 4,768
instances

Preventing scams (wire fraud, etc.)

2,319 stores

Encouraging young people to go homeduring late-night hours

7,837 storesSource: F Y2020 survey of franchise store owners and store managers (JFA); extracted
figures for Lawson only.

Strategy for Creating Happiness in Our Communities

Financial Strategy

Message from the CFO
overseas business turned profitable, registering a segment profit
of 0.8 billion yen, (an improvement of 1.8 billion from theprevious year), mainly reflecting the China business, which
rebounded quickly from the impact of COVID-19.
In this way, the Lawson Group experienced both positive
and negative influences in each segment. However, net income
attributable to owners of the parent came to 8.6 billion yen,(a decrease of 11.4 billion yen from the previous year), mainly
due to factors increasing and decreasing operating income,the recording of an impairment loss related to stores inextraordinary loss, and losses related to the COVID-19
pandemic, despite recording a gain on sale of cross-heldshares in extraordinary income.

As a company that deals directly with issues
facing society, we will maintain a sound financial
position making growth investments focused on
capital efficiency and adopting a leaner profit
structure to drive sustainable growth.

customer traffic declined by 14.2% from the previous year due
to the spread of remote working and a decrease in opportunities
for going out. Spending per customer rose by 8.0% from theprevious year, mainly reflecting growth in frozen foods, daily
foods, and fresh foods, as product lineups were expanded in
response to an increase in customers eating at home. Despite
continuous cost reduction efforts, the impact of existing store
sales was significant for the domestic convenience store
business, resulting in segment profit of 28.7 billion yen (down18.3 billion yen from the previous year).
The pandemic had an especially prominent impact on theentertainment-related business, which recorded a segment loss
of 0.2 billion yen (a deterioration of 5.6 billion yen from segment
profit in the previous year). While the adverse management
environment continued throughout the year, Lawson Entertainment worked to expand sales of online live streaming tickets
and the e-commerce business as events continued to becancelled or downscaled. At United Cinemas, we were forced tosuspend operations at all cinemas at one point, but in thesecond half of the fiscal year there were some hit movies
featuring popular animation.
In the Seijo Ishi business, our operations were supported
by growth in supermarket demand from consumers obliged tostay at home, resulting in segment profit of 10.3 billion yen,
(up by 1.9 billion yen from the previous year). Meanwhile the

Fiscal 2020 in review

Consolidated results for fiscal 2020 (to February 2021)

Segment profit

Satoshi Nakaniwa
Member of the Board
Executive Managing Officer,
Chief Financial Officer

Adoption of a lean profit structure to help
achieve management targets
In fiscal 2020, despite the adverse management environment,
we focused on reducing costs. Profits at franchise stores,
began to increase year on year from the second quarter
onward, mainly as a result of efforts to reduce the three main
costs—food waste loss, labor cost, and utility cost. We also
worked to review advertising using digital technology and took
steps to reduce land rents.

(Unit: Million yen)

Fiscal 2020 was heavily impacted by the COVID-19 pandemic,
including changes in customers’ lifestyles and purchasing
behavior. Even in this adverse management environment, theLawson Group remained constantly beside customers andsociety as a “hub of refreshment in every community,” rising
resolutely to meet the challenge. Despite these efforts, we wereunable to avoid a fall in profit compared to fiscal 2019, with
operating income of 40.8 billion yen and net income attributableto owners of the parent of 8.6 billion yen.
Existing store sales in the domestic convenience store
business decreased by 7.3% from the previous year, while(Unit: Million yen)

Gross operating revenues
Operating income

Fiscal 2019

Fiscal 2020

730,236

666,001

62,94340,876

YoY-64,234-22,066

Ordinary income

56,346

37,610-18,735

Net income attributable to ownersof the parent

20,108

8,689-11,418

Fiscal 2019

Fiscal 2020

YoY

Domestic convenience store
business

47,121

28,739-18,381

Seijo Ishi business

8,348

10,329+1,980Entertainment-related business

5,313

-297

-5,611

Financial services business

3,088

1,753

-1,335

Overseas business-1,005809+1,815

76

-456

-533

62,94340,876-22,066

Other business
Total

LAWSONINTEGRATED REPORT 2021

45

Under Challenge 2025, our vision formulated for the
Lawson Group’s 50th founding anniversary in 2025, we areworking under the guidance of the Sweeping Transformation
Executive Committee to execute further profit structure transformation. For example, in our customer-centric supply chain
reform project and our vendor distribution project, we are using
artificial intelligence (AI) and digital transformation (DX) to reduce
both wastage loss and opportunity loss at stores and in the
supply chain. Through efforts such as these, we will promote theadoption of a lean profit structure for the Lawson Group.
In our full-year plan for fiscal 2021, we have assumed
that the COVID-19 pandemic will still need more time to becontrolled, despite the steady spread of vaccinations. On thisbasis, having factored in an improvement in existing store
sales, mainly due to merchandise assortments of productsaligned to changes in customer needs and a recovery in theentertainment-related business, our plan for the fiscal year
is for consolidated operating income of 50.0 billion yen(up 9.1 billion yen year on year) and net income attributableto owners of the parent of 13.5 billion yen (up 4.8 billion).

Preserving a sound financial position andshareholder returns
Under Challenge 2025, we are aiming to achieve return on
equity (ROE) of 15% or higher, and we will strive for EPS of 500
yen or higher, representing a level of net profit that could support
a consolidated dividend payout ratio of 50%. The Lawson
Group emphasizes ROE, reflecting the importance that we place
returning profits to shareholders. In order to improve each of theelements of ROE, which is expressed as “net profit margin ×
total asset turnover × financial leverage” we will promote theabovementioned adoption of a lean profit structure, and also alean financial position by using investment criteria based on thecost of capital and replacing existing investments. At the sametime, having Lawson Bank, Inc. as a member of the Lawson
Group means that preserving a sound financial position leads tofavorable financing conditions and improved earnings capability.
As the Lawson Group continues its sustainable growth, I believe
it will be important to practice a balanced approach to
management, preserving a sound financial position while
enhancing capital efficiency.
Moreover, we also consider shareholder returns to be an
extremely important management priority. Our approach to theconsolidated dividend payout ratio is to preserve a soundfinancial position, while making a return of profit to shareholders
commensurate with earnings. On this basis, we have set thelower limit of dividends at 150 yen per share, with plans to growthe dividend sustainably through sustainable profit growth under
Challenge 2025, while maintaining the necessary internal
reserves for future business development.

Growth investments by the Sweeping
Transformation Executive Committee with
an emphasis on capital efficiency
In addition to the rapid changes in our customers and markets,
various technological innovations are also in motion. To makeappropriate investments utilizing the latest technologies, theSweeping Transformation Executive Committee drafts
investment plans that involve working rapidly through PDCA
cycles to make daily updates and act flexibly and continuously.
One such investment is the project for pursuing the ideal
store format in the domestic convenience store business. In thisproject, we plan to invest 32.0 billion yen on 5,000 stores in
2021. We are looking at store renovation that varies to suitcharacteristics such as commercial area, location, and customer
base, and we are currently in the process of detailed testing.
Meanwhile, in the Seijo Ishi business, we are planning an
addition to the central kitchen to keep pace with increased

LAWSONINTEGRATED REPORT 2021

46

demand from customers, as well as an increase in store
numbers in the overseas business, which has turned profitable.
We aim to increase the investment efficiency of the Lawson
Group by increasing the precision of our risk and return calculation for investments and realizing the maximum effect fromgrowth investments that emphasize capital efficiency.

Commitment to the SDGs
through the ESG management
With regard to environmental issues, we will take steps toreduce food loss, plastic use, and CO2 emissions throughLawson Blue Challenge 2050!, our environmental vision for2050. As part of these efforts, we will replace store-related
assets with environmentally compliant alternatives in the processof investing for renovating and renewing existing stores.
The capital markets are paying close attention toenvironmental, social and governance (ESG) investment, andthe Lawson Group has expressed its commitment to the
Sustainable Development Goals (SDGs). As a convenience
store chain, which is part of social infrastructure, we havealready taken measures to tackle social issues in thecommunity directly, such as making contributions to local
communities and taking countermeasures for labor
shortages, guided by the Group philosophy, “Creating
Happiness and Harmony in Our Communities.” We set ourrole as being the same as ever, to engage with the SDGs
through ESG management as an extension of our existing
activities. Regardless of the market environment, the Lawson
Group is committed to being the No. 1 recommendation of its
customers and community and will continue working toachieve sustainable growth and create corporate value.

A Management Foundation for Creating Happiness in Our Communities

Executives
Members of the Board

Sadanobu Takemasu Years as a Member of the Board: 7

Katsuyuki Imada Years as a Member of the Board: 4

President and CEO, Representative Director, Chairman of the Board, and CSO,
University President, Lawson University

Member of the Board, Senior Executive Managing Officer,
Corporate Strategy and Planning Division Director, —Human Resources,—New Business Division, and Executive Assistant to Deputy CSO (CSR Promotion)

Born 1969, 51 years old. Appointed Senior Executive Vice President, Representative
Director in 2014. Appointed President and CEO, Representative Director in 2016.
Mr. Takemasu has led the entire Group with a focus on the domestic convenience
store business, as well as contributed to the improvement of corporate value andthe achievement of sustainable corporate management as President and CEO,
Representative Director, Chairman of the Board, and CSO* of Lawson, Inc.

Born in 1963, 58 years old. Mr. Imada has experience at Mitsubishi Corporation andhas served as CFO, Division Director of Corporate Strategy and Planning Division,
Division Director of Next Generation CVS Division, Lawson, Inc. He has a wide
range of experience, and is currently, in charge of overall corporate strategy
including corporate planning, corporate governance, initiatives for SDGs, and thedevelopment of next-generation CVS as Director, Senior Executive Managing Officer,
Division Director, Corporate Strategy of Lawson, Inc.

*CSO: Chief Sustainability Officer

Satoshi Nakaniwa Years as a Member of the Board: 4

Keiko Hayashi Years as a Member of the Board: 5

Executive Managing Officer, Member of the Board, and CFO

Member of the Board (outside) Independent officer officer

Born in 1969, 52 years old. Mr. Nakaniwa has experience serving at Mitsubishi
Corporation, and has a wide range of experience. He has been in charge offinance and accounting, business risk management and investor relations aswell as purchase control as Director, Executive Managing Officer, and CFO of
Lawson, Inc.

Born 1959, 62 years old. Ms. Hayashi founded DoCLASSE Co., Ltd., whichhandles the planning, manufacturing, sales and delivery of clothes, fashion
goods and jewelry. As the president of the company, she has extensive
experience and expertise in corporate management. Through her experience,
including in a foreign consulting firm, she also has a strong knowledge of
product development and marketing-related operations.

Miki Iwamura Years as a Member of the Board: 3

Satoko Suzuki Years as a Member of the Board: 1

Member of the Board (outside) Independent officer

Member of the Board (outside) Independent officer

Born 1965, 55 years old. Ms. Iwamura has been proactively making
suggestions and disseminating information on workstyle reforms and thepromotion of women’s advancement in the workplace. She also has deep
insight into management, marketing, and brand reinforcement using digital big
data through her work in marketing in the Asia Pacific and Japan region for a
global IT company.

Born in 1977, 43 years old. Ms. Suzuki has served as a member of public andprivate committees related to “hospitality management” globalization ofJapanese companies. She has published many papers, presented at academic
conferences and received awards. In addition, she has a wealth of academic
knowledge on consumer behavior, marketing and brand management.

Kiyotaka Kikuchi Years as a Member of the Board: 0
Member of the Board
Born 1966, 54 years old. Mr. Kikuchi has a wealth of knowledge on the
consumer industry field, mainly in the food industry, through his duties
at Mitsubishi Corporation as well as his secondment to a meat
processing manufacturer.

LAWSONINTEGRATED REPORT 2021

47

A Management Foundation for Creating Happiness in Our Communities

Executives
Corporate Auditors

Shuichi Imagawa Years as Corporate Auditor: 1

Jun Miyazaki Years as Corporate Auditor: 0Standing Corporate Auditor

Standing Corporate Auditor

Born 1958, 62 years old. Mr. Imagawa has expertise in compliance andrisk management, as well as convenience store operations and thefranchise business based on experience acquired as manager in charge of
the Store Operation Division, Product and Logistics Division, branchmanager, vice president of CVS Company in Japan, and CR and Human
Resources Executive Officer.

Born 1955, 65 years old. Mr. Miyazaki has expertise in convenience store
operations and the franchise business, as well as extensive insight into
compliance and risk management, having been responsible for the Group’s
public relations strategy, human resource strategy, compliance and risk
management, and promotion of health and productivity management in hisrole as the manager in charge of Corporate Communications, Compliance& Risk Management, Human Resources (deputy in charge), Deputy CSO(Healthcare), and Chairman of Lawson Health Insurance Society.

Eiko Tsujiyama Years as Corporate Auditor: 10

Yuko Gomi Years as Corporate Auditor: 2

Corporate Auditor (outside) Independent officer

Corporate Auditor (outside) Independent officer

Born 1947, 73 years old. Ms. Tsujiyama has in-depth knowledge ofcorporate finance and accounting having served as a member of theBusiness Accounting Council of the Japanese Financial Services Agency
as well as serving as chairman for the National Tax Council of theJapanese National Tax Agency, and as an honorary professor (accounting)as an academic and certified public accountant.

Born 1972, 49 years old. Ms. Gomi has extensive business experienceand broad insight based on her wealth of experience in corporate legal
affairs and risk management as an attorney, as well as serving as a Legal
Advisor (part time) for the Minister’s Secretariat of the Cabinet Office.

Keiko Yoshida Years as Corporate Auditor: 1
Corporate Auditor (outside) Independent officer
Born in 1954, 67 years old. As a certified public accountant, Ms. Yoshida
is a representative of an accounting firm and has knowledge of tax affairs,
accounting and management.

Senior Vice Presidents As of May 25, 2020
Senior Executive Managing Officer
Senior Executive Managing Officer
Executive Vice President
Executive Vice President
Executive Vice President
Executive Vice President
Executive Vice President
Executive Vice President

Masakatsu Gonai
Yuichi Wada
Motonobu Miyake
Akihito Watanabe
Hitoshi Fujii
Tatsushi Sato
Hiroyuki Karasawa
Kazuhiro Wakui

Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President

LAWSONINTEGRATED REPORT 2021

48

Yasuhiko Hirokane
Zhang Joshua
Toshihiko Chihiro
Satoshi Kumagai
Tatsuya Murase
Noriaki Tsuruta
Miwako Tate
Yasuhiro Iseki
Takeji Hino
Tomoki Takanishi
Kazuhiro Harada
Hiroko Otani
Noboru Kakiuchi(Excluding Board members’ additional posts)

A Management Foundation for Creating Happiness in Our Communities

Executives

Members of the Board and Corporate Auditors (As of May 25, 2021)
Name

Position

OutsideOfficers

Independent
Officers

Nomination andCompensation
Advisory Committee*The double circle, ,indicates thechairperson.

Main area of experience and expertise

Numberof yearsin current
position

Responsibilities and concurrent positions

Member of the Board
President and CEO,7

CSO and University President, Lawson
University

Katsuyuki Imada

Member of the Board, Senior
Executive Managing Officer

4

Corporate Strategy and Planning Division
Director, –Human Resources,–New Business Division, and Executive
Assistant to Deputy CSO (CSR Promotion)

Satoshi Nakaniwa

Member of the Board,
Executive Managing Officer

4

CFO

Keiko Hayashi

Member of the Board

5

DoCLASSE Co., Ltd., President and CEO

Miki Iwamura

Member of the Board

3

Google Japan LLC Vice President,
Asia-Pacific, Japan (Marketing)

Satoko Suzuki

Member of the Board

1

Hitotsubashi University Business School,
School of International Corporate Strategy,
Associate Professor

Member of the Board

0

Executive Vice President, Group CEO,
Consumer Industry Group (Concurrently)
Division COO, Retail Div., Mitsubishi
Corporation

Shuichi Imagawa

Standing Corporate Auditor

1—

Jun MiyazakiStanding Corporate Auditor

0—Eiko Tsujiyama

Corporate Auditor

10

Professor Emeritus, Waseda University

Yuko Gomi

Corporate Auditor

2

Lawyer (Partner),
T. Kunihiro & Co. Attorneys-at-Law

Keiko Yoshida

Corporate Auditor

1

Representative, C.P.A., SHIBA Accounting
Service Office

Sadanobu Takemasu Representative Director

Kiyotaka Kikuchi

Corporate Auditor

LAWSONINTEGRATED REPORT 2021

49

Corporate
management

Corporatefinance/accounting

Legal affairs/
complianceand riskMarketing

IT/DX

Globalexperience

Franchise andretail business

A Management Foundation for Creating Happiness in Our Communities

Executive Officer Voices

Using Mitsubishi Corporation’s resources
to enhance the value of Lawson.

Respect for Lawson’s attitude ofcontinuing to take on challenges
with a spirit of trial and error.

Kiyotaka Kikuchi

Keiko Hayashi

Member of the Board
Executive Vice President, Group CEO, Consumer Industry
Group (Concurrently) Division COO, Retail Div.,
Mitsubishi Corporation

The convenience store has become a more integral part of our lifestyles than ever due to the impactof the COVID-19 pandemic. It has taken on increased importance as social infrastructure. Thischange in role is irreversible and likely to gain further momentum, driven by the continuing
demographic trend of an aging population. Going forward, consumers will focus not on the numberof stores but on their quality. I hope that stores will implement digitalization as much as possible,
while improving their merchandise assortments and service levels. Each store should aim to be aunique presence in the community, with an identity that reflects the needs of local consumers.
Mitsubishi Corporation will provide functional support to help Lawson respond to thesechanges and enhance its value. As we do so, we will also consider, from a variety of perspectives,
what Lawson means for society. Industry One, a joint venture between Mitsubishi Corporation andNippon Telegraph and Telephone Corporation (NTT), will combine Mitsubishi Corporation’s
knowledge with NTT’s digital technology to help optimize Lawson’s supply chain. Another key
initiative is data marketing that uses Lawson’s purchase data and KDDI’s location information to
reduce both waste loss and opportunity loss. In addition, with the SMARI service, rental ande-commerce products that are being returned are loaded for return delivery onto Mitsubishi
Shokuhin trucks that have come to the stores to deliver other products. This enhances bothconvenience for consumers and delivery efficiency.
As a member of the Board of Directors, I will fully utilize Mitsubishi Corporation’s resources tosupport Lawson’s self-sustained growth. I will draw from the knowledge I have gained over many
years working with the food industry and in management to provide analysis and insights from amacro perspective and from a consumer perspective. In this way, I hope to play a role in supporting
Lawson’s medium- to long-term sustainable growth.

LAWSONINTEGRATED REPORT 2021

Member of the Board (outside)
President and CEO,DoCLASSE Co., Ltd.

Lawson’s Board of Directors is characterized by a high ratio of women, who bring a wide range ofexpertise from a variety of fields. That diversity creates a unique, open atmosphere in which we
can engage in energetic discussions. In the five years since I became an outside member of theBoard, the effectiveness of the Board of Directors has steadily increased under the sincere
personality and leadership of President Takemasu. In Challenge 2025, I see a determination in
Lawson to transform itself into a company that creates new value by embracing the new normal
as an opportunity. The introduction of food delivery services such as Uber Eats, medicine delivery
services, and other value-added services such as Machikado Chubo in-store kitchens anddispensing pharmacies are major strengths of Lawson as it aims offer new forms of convenience
going forward. The Lawson Group is working to address the SDGs through initiatives based on
the “Lawson Blue Challenge 2050!” environmental vision. There could also be an opportunity for adifferent approach in which Lawson works together with its franchise stores under the concept ofachieving the SDGs together with customers by leveraging the 14,000 stores across Japan and
4,000 stores overseas as points of contact with consumers. Outside members of the Board must
always bear in mind the perspectives of individual shareholders and other stakeholders. For thisreason, we also share our opinions candidly at board meetings. One excellent trait of Lawson isthat when the team realizes that there is a better way to do something, they reflect on that and try
to change without hesitation. I have high hopes for Lawson as it continues to embrace challenges
with a spirit of trial and error.

50

A Management Foundation for Creating Happiness in Our Communities

Corporate Governance
Characteristics of Corporate GovernanceWe believe that continuous improvement in the value we offer
stakeholders contributes to the enhancement of Lawson’s
corporate value. Accordingly, we strive not only to comply withlaws, regulations and social norms, but also to reinforce ourcorporate governance by improving the soundness andtransparency of management through honest and considerate
behavior based on high ethical standards based on theGroup Philosophy and the Lawson Corporate Conduct
Charter and the Lawson Code of Ethics. It also requires
active disclosure in accordance with the “Basic Principles
Concerning Information Disclosure.”
Lawson selects people with different specialties andexperience as candidates for membership of the Board toassure diversity on the Board of Directors and enableappropriate decision-making and supervision. In addition to the
independence standards determined by the Tokyo Stock
Exchange, Inc., Lawson has established its own Judgment
Criteria Regarding Independence as a basis for selecting
several independent officers (one third or more for members of
the Board) for purposes of ensuring management transparency
and fairness.
Moreover, by introducing the Executive Officer System,
we have divided management and supervision from businessexecution to enable quick decision-making and businessexecution. It should be noted with respect to the corporate
auditors that we elect candidates for the position of corporate
auditor based on their possession of the extensive financial,accounting, risk management and/or legal expertise andexperience required to fulfill auditors’ duties.
The Company recognizes that the succession plan of the
CEO is one of our key management issues; thus, acting as anadvisory body to the Board of Directors in order to augment theimpartiality, timeliness, and transparency of the process,discussions are carried out among members of the Nomination
and Compensation Advisory Committee, comprised only frompart-time officers (six members out of the total of seven are
independent officers), to which the qualifications and attributes
required as the Company’s chief executive as well as themethod of nominating the successor are presented by the
President and CEO, Representative Director, for approval.

Although Lawson became a consolidated subsidiary of
Mitsubishi Corporation on February 15, 2017, from theperspective of protection of minority shareholders, we willcontinue our efforts to assure appropriate governance as anindependent listed company.

Lawson’s efforts related to the Corporate Governance Code(“CG Code”) are also published in various reports, including
corporate governance reports, convocation notices for general
meetings of shareholders, and securities reports. Please visit thefollowing site to see the content of disclosure items related tothe individual rules in the CG Code.

Corporate Governance CodeFor details of the Corporate Governance Code:https://www.lawson.jp/en/about/governance/

Five general principles* We plan to post a corporate governance report compliant with the revised CG
Code for June 2021 in 2021.

1. Rights and equality of shareholders
2. Appropriate collaboration with stakeholders other thanshareholders
3. Ensuring appropriate information disclosure and transparency
4. Board of Directors’ responsibilities
5. Dialog with shareholders

Details of major corporate governance measures implemented since 2000
2000

Members of the Board(number)
Outside members of theBoard (number)

2001

18

2002

20
2

2003

2004

2005

8

9

3

5

2006

2007

2008

2009

2010

2012

2013

7
4
1
1

2014

9

3

Of which independent
officers (number)
Female members of theBoard (number)

2011

2015

2016

*1

2017

2018

2019

2020

8

7

5

2

2021

3*2
3

2

3
2014 – Nomination and Compensation Advisory Committee
established.

2002 – Compensation Advisory Committee established.
2005 – Board members’ retirement benefit system abolished.

Ensuring transparencyof Board members’
compensation2005 – Share-based stock compensation options for members of the Board introduced.
2012 – Corporate auditors’ retirement benefit system abolished.

Ratio of shares held by
Mitsubishi Corporation(major movements)

2001 Mitsubishi Corporation becomes largest shareholder.

April 2015

33.4%

February 2017

50.1%

*1 T
 he number of members of the Board is as of the close of the General Meeting of Shareholders each year, except for 2014, when there were nine members of the Board up to July 31 andeight members after August 1.
*2 T
 he reduction in the number of outside members of the Board in 2017 was because two no longer satisfied the requirements of outside members of the Board due to the increase in the ratioof shares held by Mitsubishi Corporation.

LAWSONINTEGRATED REPORT 2021

51

A Management Foundation for Creating Happiness in Our Communities

Corporate GovernanceCorporate Governance System

can be expressed with a high degree of independence. Goingforward, we will continue our efforts to ensure managementtransparency and independence, and to improve corporate
value to meet the expectations of all our stakeholders.

Equipped with an agile decision-making process, Lawson has
moved quickly to construct a highly transparent andindependent corporate governance system. Independent
officers who are considered to have no conflict of interest withthe general shareholders have been appointed to comprise atleast one third of the members of the Board. Moreover, six
women have been appointed to the positions of member of theBoard or corporate auditor with a view to promoting diversity
with the composition of the executive officers taken into
consideration. They are contributing to reinforcing the corporate
governance system from various perspectives. Following thevoluntary establishment of the Nomination and Compensation
Advisory Committee to express its opinion on the candidates
for the positions of member of the Board and representative
director on the Board of Directors, meanwhile, independent
officers have been selected to fill six of seven positions as
Committee members, thus creating a system where opinions
Member of the Board(inside)Special circumstances with the potential toseriously impact corporate governance
Mitsubishi Corporation, our parent company, currently holds
50.2% of Lawson’s voting rights (50,150,000 shares). Lawson
has a business alliance with Mitsubishi Corporation, but
Lawson’s internal organizations make independent decisions
regarding management and business activities in general,
ensuring Lawson’s independence as a listed company
conducting business operations. In addition, in the businessalliance agreements concluded with Mitsubishi Corporation,it has agreed to conduct a business alliance that respects
Lawson’s independence and autonomy. We recognize that ourMember of the Board(outside, independent)

Corporate auditor(inside)Corporate auditor(outside, independent)

General Meeting of Shareholders
Appointment/ removal

Appointment/removal

Nomination andCompensation Advisory
Committee

Board of Directors

Appointment/ removal

Audit & Supervisory Board

Consultation

Audit

Audit

Certified public accountant

RemovalRecommendation

Business execution organization

Discussion/ report

President
Management meeting

Audit

Financial Reporting
Internal Control Committee

SDGs Committee
Compliance & Risk
Management Committee

Internal Audit Division

Information Security
Management Committee

Corporate divisions
Business divisions
Funding

Affiliated companies

LAWSONINTEGRATED REPORT 2021

52

Opinions

Operation status of the Board of Directors
The Company’s Board of Directors is made up of sevenmembers of the Board, including four males and three females,
three of whom are independent members of the Board. The
Board of Directors not only decides important management
matters such as issues stipulated by laws and regulations andthe Articles of Incorporation, but also monitors the conduct ofbusiness operations by its members of the Board. The Board
met 13 times in fiscal 2020. Furthermore, the Company has
adopted an executive officer system and entrusts authority to
executive officers to expedite business execution. Moreover,
the Company holds management meetings as a supplementarydecision-making body to the Board of Directors. The
management meeting comprises personnel who are generallyof executive managing officer level or above and members
designated by the President. (and met 13 times in fiscal 2020).

Status of committees

Financial audit
Appointment/removal/supervisionindependence is supported by our parent company.
As an independent listed company, Lawson determines theterms and conditions of transactions after comparing andexamining the prices offered by other companies, prevailingmarket prices, etc., even in the transactions with Mitsubishi
Corporation, Lawson’s parent company, and its groupcompanies, just like in transactions in general, in order not tocause loss to minority shareholders.

Lawyers

The Company has established and operates various committees.
These include the SDGs Committee, which conducts acompanywide response to the SDGs; the Compliance & Risk
Management Committee, which supervises the compliance andrisk management system; the Information Security Committee,
which supervises the information security maintenance andmanagement system; and the Financial Reporting Internal
Control Committee, which supervises the maintenance andeffectiveness evaluation of internal controls over financial
reporting; as well as the Lawson Group Sweeping Transformation Executive Committee, which promotes companywide
strategies for achieving Challenge 2025; the Digital
Transformation Promotion Committee, which examines andpromotes digital transformation; and the Health Hub Promotion
Committee, which plans and proposes strategies for enabling
the entire Lawson Group to function as a community health hub.

A Management Foundation for Creating Happiness in Our Communities

Corporate Governance

Policy on nomination and standards forappointment and independence of candidates
for member of the Board
Lawson has established criteria for appointing officers and formaking judgments regarding independence. The voluntarily
established Nomination and Compensation Advisory Committee
serves as an advisory body, moreover, that expresses its opinion
to the Board of Directors regarding nominations of candidates
for the positions of member of the Board and representative
director. It should be noted with respect to candidates forcorporate auditor that they are individuals with the financial,accounting, risk management and/ or legal experience andexpertise required to fulfill the duties of corporate auditors
whose candidacy is approved by the Audit & Supervisory Board.
<Appointment criteria for officers>• Persons whose views resonate deeply with the Lawson
Group’s Corporate Philosophy, “Creating Happiness andHarmony in Our Communities.”• Persons who can contribute to sustainable growth of theLawson Group and enhance its corporate value.
• Persons with good mental and physical health that will notinterfere with pursuit of their corporate duties.
• Respected persons with dignity and high ethical standards
who comply conscientiously with laws and regulations.
• Persons capable of making objective judgments, andendowed with excellent foresight and insight.
• Persons possessed of a wealth of experience and expertise incorporate management or specialized fields.
• Persons who are able to ensure sufficient time to conduct
their duties.
• Persons to whom none of the grounds for disqualification
specified in the Companies Act apply.
• As concerns independent officers, persons in compliancewith the Judgment Criteria Regarding Independence
stipulated by Lawson.
<Judgment criteria regarding independence>• A major business partner of the Lawson Group or its businessexecutors: A group of business partners that provides
products or services to the Lawson Group, where the amountof the group's transactions with the Lawson Group in theprevious business year exceeds 2% of the consolidated salesof the group.
• A major business partner of the Lawson Group or its businessexecutors: A group of business partners to which the Lawson
Group provides products or services, where the amount of theLawson Group's transactions with the group in the previous
business year exceeds 2% of the consolidated sales (grossoperating revenues) of the Lawson Group.
• Consultants, accounting experts and legal experts who havereceived large sums of money and other assets other than
executive compensation from the Lawson Group: Consultants,
accounting specialists such as CPAs and legal specialists
such as attorneys who receive money and assets other than
executive compensation from the Lawson Group, and whose
remuneration from the Lawson Group has amounted to 5
million yen or more annually for the past two years.
• Major shareholders of Lawson (in cases in which the major
shareholder in question is a corporation, the corporation’s
business executors).
• C lose relatives of the business executors of theLawson Group.
•C lose relatives of non-business executing members of theBoard or accounting advisors of the Lawson Group (in thecase of outside corporate auditors).
•O utside members of the board and outside corporate auditors
whose tenure at the time of reappointment exceeds 8 years
and 12 years, respectively, in the aggregate.
People to whom none of the above evaluation criteria
for independence apply are considered for outside officer
candidates. Note that even a person who fits any of the above
criteria can be selected as a candidate for independent outside
officer if the Board of Directors determines that said person isvirtually independent. In such case, the reason is explainedand disclosed at the time of the candidate’s appointment as
outside officer.

Succession planning for chief executive officers
Lawson recognizes that the succession plan of the CEO is oneof our key management issues; thus, acting as an advisory
body to the Board of Directors in order to augment the
LAWSONINTEGRATED REPORT 2021

53

impartiality, timeliness, and transparency of the process,discussions are carried out among members of the Nomination
and Compensation Advisory Committee, comprised only frompart-time officers (six members out of the total seven are
independent officers), which determines the qualifications andattributes required as Lawson’s chief executive as described
below. Then the method of developing and nominating the
successor is presented to the committee by the President andCEO, Representative Director, for approval.
1. Ability to respond to and engineer change
2. Strong leadership
3. High-level communication skills
4. B road perspectives for viewing the Group as a whole andstrong commitment to governance
5. Impeccable ethics
The attributes for the successor do not specify whether
they need to be from inside or outside of the Company. Whenselecting successors, multiple candidates are presented to theNomination and Compensation Advisory Committee.

Support systems for outside members of
the Board and outside corporate auditors
The Board of Directors Secretariat is established to conduct
administrative tasks for the Board of Directors, communicate
with the outside members of the Board, and submit reports
each time an incident accident occurs. The Corporate Auditors
Office with two full-time staff members is established to support
the corporate auditors in their duties, conduct administrative
tasks for the Audit & Supervisory Board, and communicate withthe outside corporate auditors.
Outside officers are provided with opportunities toacquire essential knowledge concerning the operations,finances, organization, etc., of the Company. Furthermore, toenable them to deepen their understanding of the Group’sbusiness, they are given the opportunity to participate in key
events such as conferences to announce Company policy
and to tour Group-related facilities. In order for independent
outside officers to actively contribute to discussions at theBoard of Directors’ meetings, the Company holds meetings
to exchange opinions with only independent outside officers
at least once a year.

A Management Foundation for Creating Happiness in Our Communities

Corporate Governance

Officers’ Compensation
Basic policy
Lawson’s policy is to design its remuneration system in amanner that links Board members’ compensation with returns
to shareholders, while retaining its function as an incentive forenhancement of corporate value, continuous growth andimprovement of corporate performance and ensuring asufficient and appropriate level of remuneration to reward
individual members of the Board for the duties they perform.
The base compensation includes a variable compensation
component linked to the Company’s performance, moreover,as well as a fixed compensation component. To reflect theBoard members’ contribution to improving shareholder value
more accurately, variable compensation is linked to suchearnings indicators as EPS (earnings per share). Share based
stock options—share price-linked compensation—are also
incorporated as part of the remuneration to strengthen thelinkage with returns to shareholders.
Furthermore, following a partial revision of indicators forvariable compensation in fiscal 2021, “SDG targets (CO2
reduction rate, etc.)” has now been included as an indicator

to help realize the environmental vision, Lawson Blue
Challenge 2050!.
Details of Board members’ compensation
Board members’ compensation paid by Lawson consists of (A)base compensation through cash payments and (B) share pricelinked compensation through stock option allocations. Note thatno performance-based variable compensation is paid topart-time members of the Board, because they serve therepresentative directors and Board of Directors in a specialized
supervisory and advisory capacity.
Details of corporate auditors’ compensation
Corporate auditors’ compensation is determined according
to a basic policy of paying compensation at a sufficientand appropriate level in consideration of the duties
performed by individual corporate auditors. It comprises
base compensation (fixed compensation) paid in cash.
The amount is determined through consultation with thecorporate auditors, with consideration given to suchfactors as full-time or part-time status and share of theauditing work, within a range approved by the General
Meeting of Shareholders.

A + B = Board members’ compensation
A Base compensation
Consisting of: fixed compensation (about 60%) + variable compensation (about 40%)
Fixed compensation: A fixed amount commensurate with the position determined based on internal rules
Variable compensation: Performance-based remuneration linked to the Company’s performance, including EPS(earnings per share), in the fiscal period concerned (To ensure linkage between Board
members’ compensation and shareholders’ interests)
B Share-price linked compensation

Stock options offered through allocation of shares(Recognized as compensation linked to medium- and long-term improvement in corporate value)• Exercise price per share: 1 yen• Number of shares allocated: Determined according to the number of shares allocated in accordance with theBoard member’s position and the rate of achievement of the EPS target.
• Exercise period: Exercisable only within a predetermined period after leaving the Company (Not exercisable
during tenure in office)

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54

Disclosure method for officers’ compensation
Total amounts of officers’ compensation are listed in the
Company’s securities reports and business reports.
Details of officers’ compensation (fiscal 2020)
Total compensation, total amounts by type of compensation and number of
eligible officers per company officer category(Millions of yen)
Category

Total
compensation

Total by type of compensation
Base
compensation

Stock options

Number of
eligible officers

Members of the
Board

252

180

72

9

(of which outside
members of theBoard)

(34)

(30)

(4)

(4)

Corporate auditors

81

81

—

6

(of which outside
corporate auditors)

(39)

(39)

(—)

(4)

Total

334

261

72

15

(Note) T here were seven members of the Board and five corporate auditors as of end
February 2021.

A Management Foundation for Creating Happiness in Our Communities

Corporate Governance

Assessment of the Board of Directors’
effectivenessorganization about once in three years in order to ensure theobjectivity of the results of the analysis of the self-assessment.

In order to further enforce the effectiveness and functions of theBoard of Directors, the Company conducts a “self-assessmenton the effectiveness of the Board of Directors,” mainly
consisting of a document survey to be completed by all
members of the Board and corporate auditors. Responses tothe survey for 2020 were submitted by all 12 members,
comprising eight members of the Board and four corporate
auditors (as of the date of the survey), and compiled andanalyzed by an external organization. As a result, it wasobserved that the current Board of Directors of the Company
is enforcing effectiveness through its role in the resolutionof important management matters and the appropriatemonitoring of business execution, and these results wereshared and discussed at the meeting of the Board of Directors.
Moreover, in the above survey, in order to further reinforce
effectiveness, constructive opinions were discussed at themeeting of the Board of Directors. Moving forward, we will
endeavor to make improvements to further enhance theeffectiveness of the Board of Directors, as well as ensure thatthe opinions discussed are considered. We will use an external

Status of internal control system development

Self-assessment on the effectiveness of
the Board of Directors

Writtenassessment

Promotion of
improvements• Conducted annually• Target: All members of the Board andcorporate auditors

Aggregation
and analysis

Sharing anddiscussion in
the Board of
Directors• Approximately once every
three years an outsideorganization is used toensure objectivity

The construction and maintenance of an internal control system
is considered an important issue for management to ensure
healthy, sustainable business growth. In accordance with theprovisions of the Financial Instruments and Exchange Act, in
addition to the Companies Act and Ordinance for Enforcementof the Companies Act, a Basic Policy for Maintaining the Internal
Control System is determined each fiscal year.
These policies are subject to frequent revision inaccordance with changes in the business environment in orderto ensure the effectiveness, efficiency and appropriateness ofbusiness. Efforts to develop an effective, rational internal
control system contribute to maintaining and increasing
corporate value.
Link for information about the internal control system
https://www.lawson.jp/en/about/governance/

Strengthening Group governanceLawson and the Lawson Group have established thefollowing systems to strengthen their initiatives for ensuring
the correctness of business operations.
(1) Systems for reporting to the Company on matterspertaining to the execution of duties by the subsidiary’s
members of the board, etc., and systems for ensuring thatthe performance of duties by members of the board, etc.,
of subsidiaries is efficient.
(2) Rules and other systems for risk management by thesubsidiary and systems for ensuring that the subsidiary’s
members of the board, etc., and employees execute theirduties in conformity with laws, ordinances, and the articles
of incorporation.
(3) Systems reporting immediately to the parent company uponrecognition of a situation could harm Lawson and its
affiliated companies.

LAWSONINTEGRATED REPORT 2021

55

Furthermore, Lawson has designated a compliance andrisk management officer at its major affiliated companies andmaintains a system that can respond swiftly if an incident
were to occur.

Policy on strategically held shares
Lawson sometimes holds listed shares strategically for the
purposes of raising its value over the medium to long term,
but we endeavor to keep such holdings to the minimum
required. When acquiring such holdings, we perform adetailed investigation for each individual issue to ascertain
whether the purpose of holding is appropriate, whether the
benefits and risks associated with holding are commensuratewith the cost of capital, etc. Furthermore, each year the
Board of Directors reviews the appropriateness of holdings,
and as of the end of February 2021, we held four different
listed stocks. From time to time we review the reasons forthese strategic shareholdings, taking into account, forexample, their impact on increasing our corporate value.
Furthermore, when acquiring or disposing of listed shares,
we ensure compliance with insider trading rules.

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management
Internal Control

Specified infectious disease outbreaks as a risk
In light of the COVID-19 pandemic, we have reconfirmed thatepidemics of infectious diseases present a severe business risk.
We have therefore added specific mention not only of newstrains of influenza but also various other infectious diseases asassumed risks in the formulation of Lawson’s business continuity
plan (BCP).

Internal control audits/regular meetings

Audit &
Supervisory Board

Board ofDirectors
President andCEO

Reports on important issues

Auditors

CR Executive
Officer*1
Compliance & Risk Management Committee
Compliance & Risk Management Committee
Meeting
Mutual understanding/ information exchange

Basic policy regarding the internal control system
The business of the Lawson Group encompasses a wide-range
of operations, from the core business of convenience stores tohigh-end supermarkets and entertainment-related business, tofinancial, e-commerce, and consulting services. We operate alarge number of LAWSON stores, covering every prefecture in
Japan and several markets overseas, each of which offers awide variety of products and services. As such, we are not only
required to observe various laws and regulations but must also
assess the diverse range of possible risks and implement theappropriate countermeasures. In light of these characteristics,
Lawson has established the “Basic Policy for Maintaining theInternal Control System” to support its efforts to achieve healthy,
sustainable growth. We are promoting maintenance of ourinternal control system based on this policy, while responding tochanges in our management environment, conducting periodical
reviews of the policy itself, and endeavoring to maintain andenhance an effective, practical internal control system.
The main revisions of the aforementioned Basic Policy
implemented in fiscal 2021 are described below:

Lawson’s internal control system (as of June 1, 2021)• Food Safety and Hygiene
Management Subcommittee• BC Subcommittee• Regional Office Crime Prevention
and Disaster Defense
Subcommittee• Intellectual Property/Free Gift
Labeling Measures Subcommittee• Overseas Business-related
Compliance Subcommittee

Legal Department
Risk and Information
Security Management
Department

Information Security Management Committee
Information Security Committee Meeting
Emergency Risk Management Committee(Emergency circumstances)

CRO*2 (Divisions and Areas)

Internal
control audits

Internal Audit Division

Added promotion of digital transformation (DX)As the headquarters that supports the franchise business, wehave newly added the promotion of DX through the renewal of
IT infrastructure and other measures as a means to realizing our
future vision.

Affiliated companies
Affiliated Company Compliance Officers Meeting

Close communications/basic management policy

SupportFranchise
stores*1 C
 R Executive Officer: The executive with overall responsibility for the development and implementation of a framework for identifying misconduct and problems concerning legal complianceand preventing risks from arising*2 C
 ROs (Compliance and Risk management Officers): Persons responsible for compliance in the various divisions who support the CR Executive Officer and assume overall responsibility forthe development and implementation of a framework for identifying misconduct and problems concerning legal compliance and preventing risks from arising

LAWSONINTEGRATED REPORT 2021

56

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management

Compliance and Risk Management System
Lawson has established a compliance and risk
management framework based on its Corporate Conduct
Charter and Code of Ethics. We seek to conduct businessas a good corporate citizen, acting honestly and considerately according to high ethical standards, implementing the
PDCA (Plan-Do-Check-Action) cycle, and organicallylinking our behavioral standards with our education andtraining programs, communication functions andmonitoring activities.
Management organization
Behavioral standards formulation (including
the Group Philosophy, Code of Ethics, others)

Post-emergency
review

Education, training, practice

Review and improvement of measures

Departmental
enlightenment activities
conducted by leaders

Verification of progress/monitoring of
implemented measures

Establishmentof contacts for
consultations

Conduct of duties based on behavioral
standards (implementing measures)

Formulation of compliance and risk
management measures by the respective
departments

Emergency
preparedness andresponseFormulation of behavioral standards
We have established the Code of Ethics to indicate theimportant points from an ethical perspective when taking
action based on Group Philosophy and Lawson’s Way. We
have also established the Lawson Group Human Rights Policy,
the Lawson Group Privacy Policy,
and the Lawson Group
Purchasing Policy to ensurebusiness conduct throughout theGroup. In addition, we haveorganized these into the Lawson
Group C&R Handbook, which isissued to all employees in order
Lawson Group C&R Handbook
to raise awareness.
Appointment of CR promotion officers
We have appointed an executive officer responsible for CR(compliance and risk) with responsibility for promoting
compliance and risk management. Compliance and risk
management officers (CROs) assigned to each department
at headquarters and the regional offices are tasked withestablishing and raising awareness of compliancemeasures and risk countermeasures in their respective
departments and with contributing to creation ofa culture that emphasizes compliance with social norms.
Full implementation of education and training
Lawson conducts compliance and risk management training for
all its employees each year for the purpose of improving theirethical awareness and risk response capabilities. It hasdeveloped a training system to support structured, systematiclearning, moreover, that begins with training of newly recruitedemployees and extends to training of newly appointed
management personnel and specialized occupational training aswell as compliance training for management members provided
by outside instructors. Our ongoing implementation of thesetraining programs is designed to encourage personnel in every
position and with every job description to share in the problemsolving process leading to business enhancement. We are
currently reviewing the program contents in light of our changing
risk environment.

LAWSONINTEGRATED REPORT 2021

57

 stablishing and raising awareness of the Consultation/
E
Whistleblower Hotline
In addition to Human Resources Department personnel who
specialize in consulting concerning sexual harassment andabuse of power and legal personnel who provide consultations
on legal matters, Lawson has established consultation contacts
to receive internal notifications and provide consultations
concerning compliance and risk management issues.
Besides establishing the Lawson Group Outside Consultation/
Whistleblower Hotline involving law firms and other externalorganizations, it has created a framework for providing business
partners’ employees and store crew members with anonymous
consultations and contacts to receive consultations from
franchise owners.
Lawson is working harder today than ever to increaseawareness and understanding of these services and frameworks
by communicating about them with employees and otherconcerned parties.
Reinforced operational management and monitoring
Lawson has established the Legal Department to supervise
compliance and the Risk and Information Security Management
Department to supervise risk management under the CR
Executive Officer’s direction. These departments cooperatively
serve as cross-departmental secretariats for the Compliance &Risk Management Committee Meeting and manage theprogress of measures implemented in these areas by individual
departments throughout the Group to promote an effective
compliance risk management system. The Risk and Information
Security Management Department, jointly with the IT
Department, serves as the secretariat for the Information
Security Committee Meeting to further enhance information
security management. Five separate subcommittees (the Food
Safety and Hygiene Management Subcommittee, the BC
Subcommittee, the Regional Office Crime Prevention andDisaster Defense Subcommittee, the Intellectual Property/Free
Gift Labeling Measures Subcommittee and Overseas
Business-related Compliance Subcommittee) have been
established under the Compliance & Risk Management
Committee Meeting and tasked with managing the progress ofimportant measures while preventing the emergence of risks.

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management

The subcommittees collaborate with the Corporate
Auditors Office, receiving reports on the results ofcompliance audits as needed while also providing detailed
guidance for implementing measures and offering proposals
for improvements.
Besides awareness surveys involving all the employees,
the monitoring activities extend to circulation of questionnaires among business partners concerning such matters asdelivery of merchandise to stores and store construction aspart of efforts to review the compliance systems from a
broad perspective.
Enhanced cooperation among Group companies
Officers responsible for compliance and risk management havebeen appointed by the Group companies as well, and Lawson
also holds meetings of affiliated companies’ compliance officers.
Besides formulating codes of ethics and providing training toheighten employee awareness, it conducts the same employee
awareness surveys and business partner questionnaires at theGroup companies as at Lawson. The Corporate Auditors Officeconducts audits of operational duties at the Group companies
to provide guidance and assistance in establishing andimproving their compliance, risk management and information
security frameworks.

Group officer training

Improvement of the information security
framework
The “Lawson Group Personal Information Protection Policy”
has been formulated to promote protection of personal
information. To ensure that the relevant personnel understandspecific details of the contents and are prepared to implement
them, the Company publishes potential mistakes andcomplaints that may arise at the stores, accompanied bypractical responses to them, in various manuals produced forthe stores in an effort to raise awareness. Headquarters
employees are tested periodically to ensure that they are all
reliably following the rules based on the “Lawson Office
Security Rules,” in which matters to be observed are compiled.
We have established a system for specifying methods ofgathering and storing information as well as information storage
periods and for designating persons responsible for handlingcustomers’ valuable information in each instance after advancechecking by specialist departments.
When consigning responsibility for handling personal
information to outside organizations, we require that adetailed investigation of the organization’s security framework
be conducted in advance and that consignment of the
responsibility be made only to organizations that satisfy
Lawson’s conditions.
An onsite or documented inspection is conducted annually,moreover, to ensure that the conditions are maintained.
We are also evaluating our
information security framework froma variety of other perspectives toensure that it remains robust byimplementing information security
audits by our internal audit
departments and employing
specialized outside companies tocarry out surveys of office security
and diagnose any vulnerabilities in
our information systems.
Lawson Office Security Rules

LAWSONINTEGRATED REPORT 2021

58

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management

Business risks
Main risk factors
Risk related tochanges in economic
conditions

Risks related tobusiness activities

Risks related to laws
and regulations, etc.
Risks related to thefranchise store
business

Risks related to thebanking business

Risks related todisasters, climatechange, and trouble,
etc.

Risk details

Response measures to risk, etc.
• Suppress the impact of interest rate fluctuations by monitoring market trends, diversifying fund procurement
sources and lending periods, and using procurement at fixed interest rates.
• Mitigate the impact of exchange rate fluctuations by diversifying the contract volume and timing for products
and raw materials, etc., procured overseas.
• Secure substitute materials and multiple procurement channels from different production areas for thesame materials.
• Respond to changes by pursuing ideal store formats, including stronger merchandising and product lineups.
• Promote infection prevention in stores and remote working for the Company’s employees.
• Work with suppliers to ensure rigorous application of quality management, hygiene management, and expiry
date management, as well as appropriate labelling, from the production process through to delivery and sales.
• Conduct adequate study such as third-party surveys, etc., when acquiring shares or entering business alliances,
etc., and formulate accurate business plans and clear standards for withdrawal when making a decision.
• Conduct credit investigation of new business partners as necessary and implement thorough receivables
management.

• Interest rate fluctuation

Frequency: Medium

Impact: Low• Fluctuation in exchange rates

Frequency: Medium

Impact: Low• High prices of raw materials

Frequency: Medium

Impact: Low• Changes in business activity due to factors such as consumer trends,
changing competition situation, and requests to stay at home

Frequency: Medium

Impact: High• Food safety and hygiene management and labelling

Frequency: HighImpact: Medium• M&As and business alliances

Frequency: Medium

Impact: Medium• Inability to recover receivables

Frequency: Medium

Impact: Medium• Impairment of property, plant and equipment

Frequency: Medium

Impact: Medium• Establish and test accurate investment profitability hypotheses when acquiring property, plant and equipment.

• Handling of personal information

Frequency: Medium

Impact: High• Conduct information security measures and thoroughly promote information security measures and theLawson Group Privacy Policy inside the Group.
• Partially transfer risk by taking out insurance.

Frequency: Medium

Impact: Medium• Constantly gather and analyze information about legal and regulatory revisions, etc., and respond beforehand.

Frequency: Medium

Impact: Medium• Provide sufficient information and appropriate support through daily communication with franchise stores toprevent misconduct incidents, etc., and build partnerships with franchise stores by conducting various
initiatives for continued stable store operations.

Frequency: Medium

Impact: High• Compliance with laws and regulations through compliance training, etc., at Lawson Bank, Inc.

Frequency: Medium

Impact: High• Respond to environmental changes by sharing information through regular communication between Lawson
Bank, Inc. and the Company, and examination of synergy creation.

Frequency: Low

Impact: High• Formulate business continuity plans (BCPs) and established business continuity management (BCM) structure.
• Ensure effectiveness of the Disaster Relief Manual and the BCP Manual by conducting disaster drills threetimes a year, and partially transfer risk by taking out insurance.

Frequency: Low

Impact: High• The Lawson Group Sweeping Transformation Executive Committee will lead our challenge to respond to the
new normal by anticipating new needs.

Frequency: Low

Impact: Medium• Information technology (IT) system trouble

Frequency: Medium

Impact: Medium• Quality issues with products or services, incidents or accidents occurring
at stores, etc., brand value decrease due to misconduct, etc., by Group
executives or franchise stores, and sales downturn, etc.

Frequency: HighImpact: Medium• Changes in various laws and regulations related to store development,
store operation, hygiene management, trading, and environmental
protection, etc., and changes in government guidelines in areas wherestores are opened• Cancellation of a large number of franchise agreements due todeterioration of trust with franchise store owners• Impact of misconduct at a franchise store on the brand image of theentire chain and the Group’s performance and financial position• Administrative measures such as stoppage of operations due to improper
execution of laws and regulations applicable to Lawson Bank, Inc. or
guidance from the supervisory agency• Restriction of products and services development due to new
establishment, changes, or removal of laws and regulations, and guidancefrom the supervisory agency• Delay in responding to environmental changes such as rapid expansion in
cashless settlements and sharp decrease in cash circulation• Physical damage to facilities such as vendors’ plants or disruption of
product deliveries due to natural disasters such as earthquakes, tsunamis,
floods, storm surges, typhoons, and blizzards• Temporary store closures or major changes in corporate activities, social
activities, and consumer behavior due to the spread of infectious diseaseor related state or emergency declaration• Climate change• Analysis of risks and opportunities related to climate change, ascertainment of impacts on business strategy,
and examination of climate change mitigation and adaptation measures.
• Strengthen IT system security and train for problem situations through multifaceted countermeasures covering
technological aspects, process and human aspects, and physical aspects.
• Prevent issues from arising through compliance training.

* Low frequency refers to a probability of the maximum conceivable risk event occurring once in 10 or more years. High impact indicates a maximum conceivable damage impact of 10 billion yen or more.
* The above data is based on our determination as of May 25, 2021. It does not necessarily cover all of the risks related to the Group’s business, and it also contains some uncertainty. Actual results may be different.

LAWSONINTEGRATED REPORT 2021

59

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management

Response to TCFD
To sustain the blessings of Earth for future generations, theLawson Group will consider the environment in every aspect ofour business activities and strive to achieve sustainable development and coexistence with local communities. We have madecoexistence with local communities and striving to achievesustainable development basic principles of our Lawson Group
Environmental Policy.
Furthermore, in determining the Group’s material issues, weconsider the issue of climate change, which is becoming more
severe year by year, to be an extremely important issue. As thecore company of the Lawson Group, Lawson endorsed the Task
Force on Climate-related Financial Disclosures (TCFD) in April
2020, and we are following its recommendations to promote
disclosure of information on governance, strategy, risk
management, and metrics and targets.
GovernanceLawson created the SDGs Committee in March 2019, aiming tohelp realize a sustainable society through its business activities.
The committee meets four times a year and is under the directsupervision of the president and CEO, representative director. Its
members are made up of all division managers up to the rank of
director. The committee has declared its intention to engage in“sustainable environment preservation activities toward acarbon-free society,” in order to realize “Environmental (Machi)
friendliness.” The committee is promoting the formulation ofaction plans with set targets (KPIs) and progress management.
A working group has been established under the SDGs
Committee, tasked with promoting the disclosure of information
related to climate change. The personnel in charge ofmanagement planning and accounting, who undertake businessstrategies, the personnel in charge of investor relations (IR), andthe departments that manage risk are promoting disclosure of
information related to governance, strategy, risk management,
and metrics and targets, as recommended by the TCFD. The
working group analyzes risks and opportunities related toclimate, grasps their impact on business strategy and revises
the strategy, and examines various countermeasures for

mitigating and adapting to climate change. The working groupwill also lead efforts to strengthen disclosure of the results ofthese examinations.
On March 1, 2021, we established the position of Chief
Science Officer (CSO), which has been assumed by thepresident and CEO, representative director. On the same day,
we also established the SDGs Promotion Department as a
dedicated department to further strengthen our initiatives with a
new structure.
(1) Identification of risks and opportunities
Risks and opportunities associated with climate change include
those associated with the transition to a low carbon economy,such as regulations on greenhouse gas (GHG) emissions, andthose associated with the physical changes caused by climatechange, such as weather disasters of increased intensity.
Lawson recognizes that these risks and opportunities will
emerge at different times. In the following table, they areorganized into short term (less than 3 years), medium term
(3–10 years), and long-term (10 years and above) perspectives.

Organizational structure
Board of Directors

Audit &
Supervisory Board

CSO (President
and CEO)Management
meeting

SDGs Committee(Held on a quarterly basis:
All Division Directors)(SDGs Promotion
Department)

Secretariat

TCFD Working Group

Roles of the working group• Analysis of risks and opportunities related to climate change• Ascertainment of impacts on business strategy• Examination of climate change mitigation and adaptation
measures• Disclosure of information regarding climate change-related
initiatives

Main risks and opportunities

Introduction and increase of carbon prices
Strengthening of GHG emissions
regulations
Increase in electricity prices
Transition risk
Strengthening of fluorocarbon regulations
Strengthening of plastic regulations

Physical risks

Changes in consumer lifestyles andpreferences
Increased severity of weather disasters
Average temperature increase
Introduction and increase of carbon pricing

Opportunities

Technological development in renewableenergyChanges in consumer lifestyles andpreferences
Average temperature increase

LAWSONINTEGRATED REPORT 2021

60

Timing of
emergence orrealization

Increase in store operation costs due to introduction of carbon prices
Increase in costs of raw material procurement and manufacturing due to introductionof carbon prices
Increase in energy cost due to increase in electricity prices
Increase in costs of raw material procurement and manufacturing due to increase inelectricity prices
Increase in investment cost for non-fluorocarbon equipment, etc., in stores
Increase in procurement cost for substitute raw materials compliant with plastic
restrictions

Medium term

Degradation of brand image due to delayed response to environmental awarenessMedium term

Medium term
Medium term
Medium term
Short term
Medium term

Damage due to flooding in stores, decrease in sales due to suspension of operations Short term
Increase in electricity usage at stores, distribution centers, etc.
Long term
Decrease in raw material procurement costs due to increased efficiency in suppliers’
Medium termbusiness processes and facilities
Decrease in transport cost due to increased efficiency in logistics
Medium term
Decrease in energy cost due to installation of reduced-cost solar cells

Long term

Increase in sales due to development of environmentally conscious products andMedium term
services
Increase in sales due to development of products and services tailored to changes in
Short term
customer preferences due to higher temperatures

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management(2) Scenario analysis
We are conducting scenario analysis for the entire Group
regarding the impacts on business of risks and opportunities.
To begin, we have started scenario analysis on the following
analysis targets.
Target businesses Domestic convenience store business
Scope of analysis Lawson and franchise stores
Analysis period

2030, 2050

Analysis target

Impact on stores of the increase in store
operation costs due to carbon priceintroduction, increase in energy cost due toincreased electricity prices, and increased
intensity of weather disasters

Referenced
scenarios

IEA WEO 2019, SDS STEPS (2°C), CPS (4°C)
IPCC Fifth Assessment Report, RCP2.6 (2°C)
RCP8.5 (4°C)

On the other hand, if the company has taken steps to saveenergy, it will be able to reduce not only the store operation cost
due to introduction of carbon prices, but also electricity charges,
allowing the financial impact to be controlled within a tolerable
range. Furthermore, to achieve a 100% reduction in CO2emissions per store by 2050, we must not only promote energy
saving, but also procure renewable energy. We found that
although the fluctuation in procurement prices causes a small
variation in the impact amount, the financial impact can becontrolled within a tolerable range.
Weather disasters
Our analysis results shows that the financial impact ofincreased flood damage under both the 2°C and 4°C
scenarios through to 2050 is limited and within a tolerable
range. On the other hand, an analysis by region showed that
there are some cases where stores are located in areas withhigh risk of water damage. We will therefore examine further
disaster prevention countermeasures going forward.

Metrics and targets
We are pursuing steady efforts to achieve the KPIs wedetermined in fiscal 2019 with respect to the issues andconditions faced in the social environment in 2030. Furthermore, in an effort to contribute to the formation of adecarbonized society and the vision of the SDGs, we havetaken on the challenge of even higher targets (reducing CO2
emissions, reducing food waste, reducing plastic) in ourenvironmental vision, Lawson Blue Challenge 2050! –“Save our blue planet!”

KPIs
Reducing CO2 emissions
2030

Reduce CO2 emissions per store by 50% v. 2013 levels(Target revised upward in June 2021)

2050

Reduce by 100%

Reducing food waste

Carbon prices and energy cost
We conducted a scenario analysis of the case where Lawson
conducts initiatives to save energy, which it is implementing asa material issue, and the case where it does not conduct theinitiatives, taking into account the future carbon prices,
electricity sector emissions, and projected electricity prices.
We also conducted an analysis of the procurement cost of therenewable energy needed to achieve 100% reduction in CO2emissions per store by 2050, which Lawson has set as an
initiative for promoting the SDGs. The result of this analysis
indicates that if a carbon price of $100 to $140 per ton of CO2
were introduced to keep the increase in temperature below
2°C at both 2030 and 2050, even taking into consideration adecrease in emissions factors for the electricity sector due todecarbonization, the Company will experience a certain
amount of financial impact if it does not take measures toreduce energy consumption.

(3) Policy and initiatives going forward based on
analysis results
Lawson has identified climate change-related risks andopportunities, and conducted analysis of their impact on
business based on the 2°C and 4°C scenarios. Thisinitiative has only just started, and it will be necessary tofurther enhance and examine the content of the initiative
going forward.
In addition, with the recent increase in momentum on
climate change issues around the world, there has beensignificant activity in Japan and globally in terms of creating
policies, laws, and regulations regarding climate change.
Under these conditions, we will work to revise our businessstrategies and increase the accuracy of our analysis, partly topromote countermeasures that contribute to climate change
mitigation and adaptation. Furthermore, by disclosing theresults of this analysis, we aim to respond to the demands ofour stakeholders.

LAWSONINTEGRATED REPORT 2021

61

2030

Reduce food waste by 50% v. 2018 levels

2050

100% reduction of the same

Reducing plastic
Reduce plastic for containers and packaging by 30% v.
2017 levels
2030

Use 50% eco-friendly materials for plastics used inoriginal product containers and packaging
Reduce plastic shopping bags by 100%2050

Use 100% eco-friendly materials for plastics used inoriginal product containers and packaging

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management

Responses to emergencies

Assuring continuity of business operations

Lawson places particular emphasis on “food safety and hygiene
management,” “information security” and “disaster relief,” and it
has prepared a structure for responding to emergencies andresolving problems rapidly.
Meetings of the Compliance & Risk Management
Committee and the Information Security Committee as well as of
the five subcommittees are convened under ordinary
circumstances to assess risks and to formulate and promotemeasures to avoid them and prevent their occurrence.
Should a serious risk situation arise, an Emergency Risk
Management Committee is organized to resolve issues swiftlyand minimize damage. Once the problems have been resolved,
the Company analyzes the factors contributing to theoccurrence and reviews and improves the relevant measures toprevent any recurrence.
We are reinforcing our emergency response capabilities,
moreover, through efforts such as formulating the BusinessContinuity Plan (BCP) and implementing disaster mitigation
measures. Our aim is to institute a business continuity (BC)framework that prevents interruption of important businessactivities, even when emergencies involving serious
damage occur.

Fundamental policies and objectives for maintaining BC
Interruption of important business activities shall be avoided,even when emergency situations involving serious damage
occur, while maintaining a priority on securing people’s safety
and wellbeing. Even if business operations are unavoidablyinterrupted, critical functions shall be resumed quickly inorder to avoid undermining our customers’ satisfaction or
corporate value.

“Resilience Certification”
Lawson is certified as an enterprise that contributes
to the building of national resilience against disasters.
In accordance with the “Guidelines relating to certificationof groups contributing to the building of national
resilience against disasters” establishedby the National Resilience Promotion
Office, Cabinet Secretariat in February
2016, Lawson was recognized by the
Association for Resilience Japan as thefirst convenience store to contribute to
the building of national resilienceagainst disasters.

Three main goals for maintaining BC• Fulfilling Lawson’s mission as a “community lifeline”
We will endeavor to ensure uninterrupted provision of
products and services to customers by keeping stores open
whenever possible.
• Continuation of the franchise businessWe will determine specific periods and methods for resuming
operations and maintain the requisite level of franchiseheadquarters operations.
• Securing appropriate earnings
We have implemented measures in consideration of the impact
emergencies could exert on earnings and of social conditions inorder to secure an appropriate level of earnings necessary to theCompany’s survival.
Practical procedures are compiled in the BCP, and we are
pursuing efforts to establish a BC framework in line with
the BCP, and to sustain and enhance it, as important issues
for management.
Mechanism for enhancing BC capabilities
Activities conducted to improve response capabilities are
essential for sustaining a corporate climate adapted toresponding sensitively to a variety of crises. Lawson is continually reviewing such business components as “hardware” factors
involving office buildings and lifelines, “software” factors involving
its BCP and manuals, and “skills” factors involving employees

LAWSONINTEGRATED REPORT 2021

62

and franchise stores. The Company uses its findings to
implement improvements in crisis response capabilities
throughout the Group.
Formulation of the Disaster Relief Manual and
BCP Guidelines
Lawson has formulated the “Disaster Relief Manual” defining theapproach toward disaster relief and the standard of conduct of
the organization and its employees in the event of a disaster.
There are different versions of the manual, “Concept ofOperations,” “Initial Actions,” and “Response and Recovery
Actions,” in which the response rules and procedures formeasures according to the disaster level for all employees andthe entire organization are described.
Additionally, in the event of a major incident impacting
the headquarters operations, to ensure the continuance ofimportant business activities as the franchise headquarters,
we have formulated the “BCP manual” defining theorganization’s standard of conduct. The BCP manual
describes the operating procedures, etc., in the occurrenceof the Tokyo Inland Earthquake.

Disaster relief
manual

BCP manual

A Management Foundation for Creating Happiness in Our Communities

Compliance and Risk Management

Disaster preparedness and response
When large-scale disasters occur, our first priority is to confirm
the safety of Lawson employees and our franchise owners andcrews. Lawson conducts Companywide training three times ayear in which participants acquire experience in implementing
a variety of measures, including responding by telephone,email and disaster message dialing and applying the safety
check system. This prepares every individual to respondsmoothly should emergencies arise. Manuals elucidating therequisite disaster preparedness and responses are distributed
to the stores.
When disasters occur, disaster relief headquarters are set
up immediately in three locations in the affected area: headquarters, regional offices and local sites. Lawson takes advantage ofa Disaster Information Map System designed to enable
personnel to confirm the disaster situation in real-time andimplement support measures for shops, factories and delivery
centers, so that stores in the disaster area can be reopened forbusiness at an early date.

Disaster Information Map System
A comprehensive Disaster Information
Map System for mapping disaster
information in real time. The information
is monitored and collected 24 hours aday, 365 days a year.

Response to torrential rains in July 2020
In July 2020, torrential rains in Kumamoto Prefecture
forced many stores to suspend their operations.
In the carparks of stores
whose operations weresuspended due to flooding
inside, we sold products
from mobile sales vehicles(rice balls, bakery items,
Lawson mobile sales vehicle
daily necessities, etc.).

Cooperation with local governments at timesof disaster
In its capacity as a community lifeline, Lawson is making
progress toward concluding agreements with local governments
concerning cooperation in the provision of goods andassistance to stranded commuters in times of disaster.
<Entities concluding agreements on provision of goods in timesof disasters*>• Local governments: 47 prefectures, 23 cities and wards• Mass transit systems: 11• Electric power companies: 4• Others: Tokyo Fire Department and Japan Ground Self-Defense
Force, fuel companies<Entities concluding agreements on assistance tostranded commuters*>• L ocal governments: 43 prefectures, 10 ordinancedesignated cities* As of June 1, 2021

Appointment to the designated public institution based on
the Disaster Countermeasures Basic Act
As of July 1, 2017, Lawson was appointed a designated public
institution by the Prime Minister based on Article two, Item fiveof the Disaster Countermeasures Basic Act.
During times of normal operation, the Company formulates
disaster prevention work plans, conducts disaster drills andstockpiles goods and materials in preparation for playing animportant role in disaster prevention, emergency response andrestoration. In so doing, it works closely with the relevant
government and municipal offices.

Actions taken as crime prevention measures
1. Promotion of security camera installation
Security cameras are installed at every store to discourage
potential perpetrators from committing crimes and to support
investigations that may lead to the arrest of perpetrators in theunlikely event an incident should occur. We have upgraded to adigital security camera system, moreover, which provides
sharper images and improved recording capabilities.
2. Creation of an environment for store crew education
Reminders to raise awareness of crime prevention are
distributed for display on POS cash registers and store
computers, and crime prevention DVDs are also delivered tostores for use in educating their store crew members. Various
tools and manuals, such as crime prevention self-check lists,have also been prepared.
3. Enhancing guidance provision during patrols
In addition to the regular store patrols, we also provide
crime prevention support for stores during late-night andcrime prevention patrols to raise awareness together withfranchise stores.
4. Conducting crime prevention drills
Employees are trained under police direction in methods of
responding to robberies, including throwing of anti-crime color
paintballs. In recent years, we have also been conducting
special fraud prevention drills.

Crime prevention at stores
We conduct education to ensure that store personnel act
with the highest priority placed on personal safety and withcrime prevention in mind, in ways such as greeting customers
in a cheerful and spirited manner. In addition to the following
measures implemented by headquarters, we are cooperatingwith the police and the Japan Franchise Association inefforts to prevent crimes against the convenience store
industry as a whole.
LAWSONINTEGRATED REPORT 2021

63

A DVD on measures to prevent robberies
and other crimes
A crime prevention self-check list

Finance – Company Information

Eleven-Year Financial Summary(Millions of yen)

For the year:
Gross operating revenues   Franchise commissions from franchise stores  Net sales  Other
Total operating revenues
Operating income
Net income attributable to owners of the parent
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in (provided by) financing activities
Capital expenditures
Depreciation and amortization*2
At year-end:
Total assets
Net assets
Shareholders’ equity ratio
Cash and cash equivalents
Total number of stores in Japan
Number of employees (full-time)
Per share data:
Net income (yen/ U.S. dollars*1)
Cash dividends (yen/U.S. dollars*1)
Payout ratio
Financial data:
Return on equity (ROE)
Return on assets (ROA)
Net sales of all stores (Domestic convenience store business):
Net sales by store format*3*4  Franchise stores  Company-operated stores
Net sales by product category*3*4  Processed foods  Fast foods  Daily foods  Non-food products
Net sales of all stores
Ratio of operating income to net sales of all stores

2019

2020

(Fiscal year)

2018

2017

2016

¥
		
		
		
		
		
		
		
		
		
		

288,480
275,945
101,576
666,001
40,876
8,689
227,954(29,983)(140,642)
48,83780,778

¥
		
		
		
		
		
		
		
		
		
		

314,260
302,843
113,132
730,236
62,943
20,108
202,703(49,074)(163,910)
90,726
79,183

¥
		
		
		
		
		
		
		
		
		
		

302,136
288,579
109,931700,647
60,781
25,585
128,594(81,017)
277,937
140,071
66,844

¥
		
		
		
		
		
		
		
		
		
		

289,232
264,734
103,357
657,324
65,82026,828113,938(91,209)(61,238)
140,495
58,601

¥
		
		
		
		
		
		
		
		
		
		

275,312254,169
101,806
631,288
73,77236,40099,864(76,227)(25,638)
119,784
56,199

¥
		
		
		
		
		

1,365,430
272,93119.6%
401,136
14,476
10,385

¥
		
		
		
		
		

1,357,732
275,347
20.0%
343,583
14,444
10,572

¥
		
		
		
		
		

1,342,329
281,98220.6%
354,236
14,65910,395

¥
		
		
		
		
		

900,256
281,44630.6%
30,12013,992
10,028

¥
		
		
		
		
		

866,577
285,995
31.7%
67,692
13,111
9,403

¥
		
		

86
150
172.7%

¥
		
		

200
150
74.6%

¥
		
		

255
255
99.7%

¥
		
		

268
255
95.1%

¥
		
		

363
250
68.7%

		
		

3.2%
0.6%

		
		

7.3%
1.5%

		
		

9.3%
2.3%

		
		

9.7%
3.0%

		
		

13.5%
4.4%

¥
		

2,132,618
33,200¥		

2,296,838
48,162¥		

2,233,739
51,569¥		

2,069,609
91,075¥
		

1,958,550
84,736

		
		
		
		
¥
		

1,156,760
462,497343,772
202,788
2,165,818
1.7%

		
		
		
		
¥
		

1,237,391
546,542
351,442
209,624
2,345,000
2.5%

		
		
		
		
¥
		

1,202,619
544,530
329,545
208,6122,285,308
2.5%

		
		
		
		
¥
		

1,138,966
509,415
314,481
197,821
2,160,684
2.9%

		
		
		
		
¥
		

1,073,044
481,267
294,141
194,833
2,043,287
3.4%*1. The U.S. dollar amounts represent the Japanese yen exchange rate against the US dollar as of February 26, 2021 ($1 = ¥106.25).
*2. These figures include depreciation and amortization of intangible assets.
*3. These figures include sales reported by franchise stores and are unaudited.
*4. Net sales for the fiscal years 2016, 2017, 2018, and 2019 represent sales by stores operated by Lawson, Inc. as well as those by Lawson Sanin, Inc.

LAWSONINTEGRATED REPORT 2021

64

(Millions of yen)

2015

2014

2013

2012

2011

(Thousands of U.S. dollars*1)

2010

2020

¥
		
		
		
		
		
		
		
		
		
		

261,681
227,606
94,165
583,452
72,541
31,381
112,205(68,657)(50,201)
106,747
49,293

¥
		
		
		
		
		
		
		
		
		
		

247,681
174,044
76,188497,91370,482
32,686
110,567(100,434)(3,289)141,251
41,826

¥
		
		
		
		
		
		
		
		
		
		

242,078
168,159
75,009
485,247
68,12637,96581,503(47,924)(39,650)
84,03247,888

¥
		
		
		
		
		
		
		
		
		
		

230,002
192,942
64,500487,445
66,24633,182
85,188(54,196)(31,979)
77,36143,886

¥
		
		
		
		
		
		
		
		
		
		

215,573
208,063
55,320478,957
61,76924,88586,356(52,912)(27,544)
74,572
37,845

¥
		
		
		
		
		
		
		
		
		
		

197,673
192,329
51,274441,277
55,54025,386
72,210(30,522)(28,798)
50,32633,083

$
		
		
		
		
		
		
		
		
		
		

2,715,106
2,597,129
956,0096,268,245
384,715
81,7792,145,449(282,193)(1,323,689)
597,892
760,264

¥
		
		
		
		
		

803,212272,997
32.9%
69,793
12,395
8,377

¥
		
		
		
		
		

764,614
263,797
33.5%
76,754
12,276
7,606

¥
		
		
		
		
		

620,992
250,497
39.5%
68,75911,606
6,336

¥
		
		
		
		
		

579,809230,18139.1%
72,766
11,130
6,404

¥
		
		
		
		
		

531,453214,662
39.7%
73,67010,457
6,475

¥
		
		
		
		
		

476,036
208,466
42.7%
67,712
9,994
5,703

$
		

12,851,106
2,568,762

		

3,775,398

¥
		
		

314
245
78.1%

¥
		
		

327
240
73.4%

¥
		
		

380
220
57.9%

¥
		
		

332
200
60.2%

¥
		
		

249
180
72.2%

¥
		
		

255
170
66.8%

$
		

0.81
1.41

		
		

12.0%
4.0%

		
		

13.0%
4.7%

		
		

16.1%
6.3%

		
		

15.2%
6.0%

		
		

12.0%
4.9%

		
		

12.8%
5.5%

¥
		

1,880,395
79,872¥
		

1,827,779
105,019¥
		

1,810,418
126,873¥		

1,747,915
156,339¥		

1,651,433
173,820¥		

1,499,576
183,205$
		

20,071,699
312,471

		
		
		
		
¥
		

1,033,448
463,431
276,885
186,498
1,960,266
3.5%

		
		
		
		
¥
		

1,034,355
429,212277,210
192,020
1,932,798
3.6%

		
		
		
		
¥
		

1,060,455
408,672
275,437
192,726
1,937,292
3.5%

		
		
		
		
¥
		

1,063,120
372,706
271,920
196,506
1,904,254
3.5%

		
		
		
		
¥
		

1,022,378
345,226
263,101
194,546
1,825,253
3.4%

		
		
		
		
¥
		

897,415
321,851
264,166
199,348
1,682,782
3.3%

		
		
		
		
$

10,887,153
4,352,913
3,235,501
1,908,593
20,384,169

LAWSONINTEGRATED REPORT 2021

65

Finance – Company Information

Industry Trends and Sales / Store Related Data
Industry Trends
Annual sales for the convenience store industry in 2020 (January to December) amounted to
11,642.2 billion yen, down 4.7% year on year. The decline mainly reflected a decrease in thenumber of customers visiting stores in office areas and tourist spots due to the effects of people
working from home and sheltering at home, despite strong sales of fresh foods and deli items due
to lifestyle changes stemming from the COVID-19 pandemic, and an increase in spending per
customer due to bulk purchases and the effects of the GoTo Campaign. The total number of storesas of the end of December was 56,542, which was roughly the same level as the previous year.** For annual sales and the total number of stores, we referred to the “Current Survey of Commerce” issued by the Ministry of Economy,
Trade and Industry. For the increase/decrease ratio in existing store sales, we referred to the “Convenience Store Statistics Investigation
Annual Report" issued by the Japan Franchise Association.

Number of convenience stores(Stores)(Calendar year)

Number of
56,542convenience stores(Billions of yen)(Calendar year)

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

Total retailindustry annual
sales*2

146,457 145,047 144,965 142,514 139,877 140,666 141,219 138,897 137,585 135,157 136,479

Convenience store
sector annual
sales*2

11,642

Convenience store
share

7.9%

12,1848.4%

11,978
8.3%

11,745
8.2%

11,445
8.1%

10,995
7.8%

10,423
7.3%

9,872
7.1%

9,477
6.9%

8,774
6.5%

8,113
5.9%

Source: “Current Survey of Commerce,” Ministry of Economy, Trade and Industry*1. T he figures above reflect the revision of the figures in 2004 and onwards that the Ministry of Economy, Trade and Industry compiled in
March 2013.
*2. A
 nnual sales amounts of the retail industry and the convenience store sector are on a calendar-year basis.

The net sales of all stores among the top three chains in the convenience store industry*1(Billions of yen)

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

56,502

56,57456,37455,63654,50552,72550,23447,801

43,37342,347

Source: “Current Survey of Commerce,” Ministry of Economy, Trade and Industry

Non-consolidated operating results(Millions of yen)
(Fiscal year)

Retail industry market size and convenience store share*1

2020

2020

As a
percentage
of all stores

2019

2018

2017

2016

Net sales of all
stores2,165,818

Gross operating
revenues

354,825

16.4%

390,811 17.0%

385,678 17.2%

372,891

Gross operating
profit330,600

15.3%

356,385

15.5%

348,491 15.6%

335,792 15.9%

325,716

Selling, generaland administrative
expenses

304,449

14.1%

311,660

13.6%

302,779 13.5%

284,771 13.5%

268,296 13.2%

Advertising andpromotional
expenses

9,800

0.5%

14,1120.6%

13,363

0.6%

12,5460.6%

13,8080.6%

Personnel
expenses

44,845

2.1%

46,2612.0%

45,9032.0%

44,722

2.1%

41,5272.0%

Facility expenses

180,7098.3%

181,194

7.9%

172,5747.7%

160,243

7.6%

150,182

7.4%

Other SG&A
expenses

69,094

3.2%

70,091

3.1%

70,9393.1%

67,2603.2%

62,7793.1%

100.0% 2,296,156 100.0% 2,236,125 100.0% 2,110,454 100.0% 2,027,504 100.0%
17.6%

356,186 17.5%
16.0%

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

Operating income

1.2%

44,725

1.9%

45,711

2.0%

51,021

2.4%

57,419

2.8%

2,349

26,150Lawson

2,506

2,424

2,283

2,157

2,049

1,961

1,945

1,907

1,826

1,683

Ordinary income

33,7001.6%

45,9622.0%

51,4432.3%

50,5082.4%

56,4592.7%

Seven-Eleven
Japan

4,871

5,010

4,899

4,678

4,516

4,291

4,008

3,781

3,508

3,281

2,948

Net income

15,8940.7%

15,4860.7%

31,002

1.4%

19,4170.9%

19,0880.9%

FamilyMart*2

2,764

2,965

2,983

3,016

3,009

2,006

1,860

1,722

1,585

1,535

1,440

Total of the top
three chains

9,984

10,482

10,306

9,977

9,682

8,346

7,829

7,448

7,000

6,642

6,071

(Fiscal year)

Total market shareof the top threechains

85.76% 86.03% 86.04% 84.95% 84.60% 75.90% 75.11% 75.45% 73.86% 75.70% 74.83%

Source: Data published by each company*1. T he figures for the top three chains are on a fiscal-year basis, while the total market share of the top three chains is the proportion inconvenience store sector annual sales on a calendar-year basis.
*2. In September 2016, Circle K Sunkus and FamilyMart merged and in November 2018, brand integration of approximately 5,000 stores
was completed.

LAWSONINTEGRATED REPORT 2021

66

Management Policies for Fiscal 2020

Overview of Merchandise and Services

In fiscal 2020, COVID-19 infections began to spread worldwide. In Japan, the first emergency
declaration issued for the entire country in April 2020 had a profound impact on economic andsocial activity and on people’s lifestyles. After the state of emergency was lifted in May 2020, theeconomy began to recover gradually. However, case numbers began to rise again from November
2020, and a second state of emergency was declared for 11 prefectures in January 2021. Thisslowed the recovery of economic and social activity and impacted on people’s lifestyles. The
pandemic also drove increased adoption of remote work, which triggered changes in lifestyles andpurchasing behavior. The Lawson Group’s business was also affected by these changes. Althoughsales for the Lawson Group declined significantly, we took steps to respond to the changes bystrengthening our product lineup, expanding our delivery services, and increasing the number ofcampaigns in which customers can participate with their smartphones.

Sales declined significantly due to a decrease in the number of customers. However, as more
people cooked at home instead of going out, we expanded our lineup of products such as fresh
vegetables, frozen foods, daily foods, resulting in a significant increase in sales of these products.
In the spring of 2020, we relaunched our private brand products, replacing the existing“LAWSON SELECT” brand with two new brands, “L basic” and “L marche” with renewed logos
and packaging as part of our efforts to develop products centered on deli items and so forth,which are in high demand. We will continue working to create stores that respond to the changes
in customer lifestyles and needs that have been triggered by the pandemic.
In addition to the Uber Eats food delivery service, we introduced support for “foodpanda”
from November 2020 to meet growing demand due to the pandemic. As a result, the total
number of stores offering both food delivery services combined reached 1,472 outlets in 27
prefectures as of the end of February 2021. In addition, as a new initiative and a first for Uber Eatsin Japan, three Lawson stores in Tokyo have started handling over-the-counter drugs.
We expanded SMARI, our cashier-free shipping service that uses dedicated SMARI boxes, to
the Chubu region in November 2020, introducing it at 250 stores in Aichi Prefecture. This brought
the total number of stores offering the service to 2,850 stores in the Tokyo, Nagoya and Osaka
areas as of the end of February 2021.

Overview of Domestic Convenience Store Business
After the state of emergency was lifted in May 2020, the number of customers and sales entereda recovery trend. However, as COVID-19 case numbers began to rise again from November 2020,a second state of emergency was declared in January 2021, resulting in a decrease in the numberof customers. Case numbers declined from February 2021, leading to a recovery trend in thenumber of customers and sales.
At our stores, we continue to put the safety of our customers and store employees first.
We have adopted a range of measures to prevent the spread of COVID-19, such as installing
plastic sheets at checkout counters, maintaining social distancing, encouraging workers towash their hands and gargle, disinfecting thoroughly with alcohol, and ensuring that masks
are worn. We have also been actively promoting the use of self-checkout machines, which
reduce the amount of human contact during the checkout process.
In terms of operations, as well as pursuing profits for our member stores, we are continuing to
implement measures to realize our three commitments: “Superior taste,” “Human kindness,” and“Environmental (Machi) friendliness.” Our aim is for LAWSON to be recommended by all customers.
We are further strengthening our merchandising by developing tasty and health-conscious productsthat only Lawson can offer. In addition to this, we are also working to ensure that we provide
courteous customer service as well as promoting environmental initiatives, such as reducing foodwaste, plastic usage, and CO2 emissions.

LAWSONINTEGRATED REPORT 2021

Overview of Store Operations
In store operations, we continued to focus on reinforcing adherence to the Three Essential
Practices, which emphasizes (1) serving customers courteously; (2) providing a quality productoffering that meets community needs; and (3) keeping our stores and communities clean. We
also continued our efforts to improve the profitability of franchise stores, such as increasing theefficiency of store operations and reducing waste loss and utility costs. At the same time, we
focused on expanding our lineup of products that have seen increased demand during the
pandemic to increase sales while meeting the needs of our customers.

67

Overview of Store Development
In store openings, the Group continued to prioritize profitability.
In fiscal 2020, the total number of LAWSON, NATURAL LAWSON, and LAWSON STORE
100 stores opened in Japan was 373, while the number of these stores that closed was 341.
This brought our total number of stores in Japan to 14,476 as of the end of February 2021.*
In our effort to build a convenience store model that caters to an aging population andrising health consciousness, we are continuing to expand healthcare-focused stores that offer
over-the-counter drugs and prescription drugs in partnership with dispensing pharmacies anddrugstore chains, as well as a larger product lineup of cosmetics and daily necessities thanregular LAWSON stores. Including these healthcare-focused stores, the number of stores
handling over-the-counter drugs totaled 250 as of the end of February 2021 (of which 53
stores were Pharmacy LAWSON stores equipped with dispensing pharmacies). In addition,
the number of stores with a nursing care consultation counter reached 23 as of the end of
February 2021. Furthermore, we have also been expanding our chain of Hospital LAWSON
stores, which are in-hospital convenience stores that offer an enhanced lineup of products
such as daily necessities for hospital stays, medical hygiene, and nursing care-related
supplies, in addition to standard convenience store products and services. The number ofthese stores reached 335 as of the end of February 2021. Using the expertise we havedeveloped by operating in-hospital LAWSON stores, we will continue to support the lives ofall people interacting with hospitals.
NATURAL LAWSON stores offer an assortment of products exclusive to these stores,
whose concept is to support beautiful, healthy and comfortable lifestyles. These include original
products with carefully selected ingredients and collaborative products with famous brands.
Meanwhile, LAWSON STORE 100 is a mini-supermarket that mainly offers a basic productlineup of fresh foods, meeting customers’ daily dietary needs by delivering safe, well-selected
vegetables and fruits with an emphasis on freshness and quality. It serves a wide range ofcustomers from children to senior citizens, with a focus on single person and homemakercustomers. As of the end of February 2021, the number of NATURAL LAWSON stores was 143,
and the number of LAWSON STORE 100 stores was 679.
* The numbers of openings and closings and the total number of stores in Japan include the number of stores operated by Lawson, Inc.,and stores operated by Lawson Kochi, Inc., Lawson Minamikyushu, Inc., and Lawson Okinawa, Inc. which are equity-method affiliates.

Number of convenience stores in Japan

stores(Stores)

2019

2018

2017

2016

14,476

14,444

14,65913,992

13,111

Openings

373

554

1,067

1,250

1,143

Closings

341

769

400

369

427

Net increase (decrease)

32

–215

667

881

716

Total number of storesstoresshare

storesshare

LAWSON

221

1.5%

–42

263

1.8%

303

2.1%

NATURAL LAWSON

18

0.1%

–4

22

0.2%

24

0.2%

Franchise stores
Type B

1,786

12.3%

–8

1,794

12.4%

1,839

12.5%

Type G

1,320

9.1%

–22

1,342

9.3%

1,466

10.0%

Type C

9,744

67.3%

444

9,300

64.4%

9,244

63.1%

NATURAL LAWSON

125

0.9%

2

123

0.9%

115

0.8%

LAWSON STORE 100

679

4.7%

–63

742

5.1%

806

5.5%

13,89396.0%

307

13,586

94.1%

13,797

94.1%

Subtotal
Lawson Sanin, Inc.
Company-operated stores

—

—

–5

5

0.0%

5

0.0%

Franchise stores

—

—

–280

280

1.9%

287

2.0%

—

—

–285

285

2.0%

292

2.0%

Subtotal
Lawson Kochi, Inc.
Company-operated storesFranchise stores
Subtotal

4

0.0%

–1

5

0.0%

6

0.0%

135

0.9%

1

134

0.9%

134

0.9%

139

1.0%

—

139

1.0%

140

1.0%

Lawson Minamikyushu, Inc.
Company-operated stores

2

0.0%

–1

3

0.0%

3

0.0%

197

1.4%

5

192

1.3%

194

1.3%

199

1.4%

4

195

1.4%

197

1.3%

Lawson Okinawa, Inc.
Company-operated storesFranchise stores
Subtotal
Total number of convenience storesin JapanNote: Including the number of stores operated by Lawson Mart, Inc., Lawson Kochi, Inc., Lawson Kumamoto, Inc., Lawson Minamikyushu,
Inc., and Lawson Okinawa, Inc.

LAWSONINTEGRATED REPORT 2021

stores2018

Company-operated stores

Subtotal

2020(Fiscal year)

share

2019

Lawson, Inc.

Franchise stores

Number of stores in the convenience store business in Japan

Net increase(decrease) in
the term

2020(Fiscal year)

68

3

0.0%

–2

5

0.0%

4

0.0%

242

1.7%

8

234

1.6%

229

1.6%

245

1.7%

6

239

1.7%

233

1.6%

14,476100.0%

32

14,444100.0%

14,659100.0%

Other New Initiatives
On September 10, 2020, we entered into a joint business agreement with POPLAR Co., Ltd. toconvert and operate some of the stores operating under the POPLAR, SEIKATSU SAIKA, and
THREE EIGHT brands into LAWSON POPLAR and LAWSON brands.
On November 30, 2020, we conducted a self inspection and formulated and published an
improvement plan in response to the “Fact-Finding Survey Report on Transactions between the
Headquarters of Convenience Stores (Franchisers) and their Franchisees” (September 2020)
and the “Fact-Finding Survey on Transactions between the Headquarters of Convenience
Stores (Franchisers) and their Franchisees (Overall Questionnaire Results)” compiled by the Fair
Trade Commission.
To stabilize the operations of franchise stores, we are working on short-, medium- andlong-term support measures. These include providing support for the operation of multiple stores,
support for store manager training, and measures for new franchisees. We are making efforts toimprove sales and profits of our franchise stores through strong partnership with them. These efforts
include providing financial support on an individual store basis to stores that experienced a significant decrease in sales due to the COVID-19 pandemic.
We are supporting local businesses and producers through LAWSON stores by developing
products in collaboration with businesses throughout Japan that have been impacted by
the pandemic.

In terms of consolidated results by product category, while sales of rice products andcounter fast foods were sluggish, sales of frozen foods, daily foods, and fresh foods increased
significantly as more people cooked at home due to the adoption of remote work and social
distancing. In addition, the Machikado Chubo in-store kitchen service saw a significant increasein sales over the previous year as its boxed meals, which are carefully prepared in-store, grew inpopularity due to there being fewer opportunities for people to go out. In addition, the newseries of Uchi Café sweets, Uchi Café Spécialité, sold well as special treats for people to reward
themselves amid the prolonged period of sheltering at home. Sales of products related topopular anime and collaboration products were also well received, with cumulative sales
exceeding 10 billion yen.

YoY changes in net sales of existing stores, average number of customers and averagespending per customer*
Net sales of existing stores

Average number of customers

Average spending per customer

110
100
90
80

Overview of Businesses in Figures

70

Net sales
Net sales of all LAWSON stores (consolidated) in fiscal 2020 were 2,349.7 billion yen (down 6.3%
from the previous year). This was due to a decrease in store sales in the domestic convenience
store business as a result of the increased adoption of remote work as well as social distancing
measures that discouraged people from going out. Other factors included a decrease in sales in theentertainment-related business due to the cancellation and postponement of box-office
performances and theater closures.
Sales of existing stores for fiscal 2020 (non-consolidated basis) decreased by 7.3% comparedto the previous fiscal year due to the impact of the COVID-19 pandemic throughout the year. The
average number of customers decreased by 14.2% year on year due to remote work and adecrease in opportunities for outings and events. However, average spending per customer
increased by 8.0% year on year. This was due to growth in sales of fresh vegetables, frozen foods,
and daily foods—areas in which we expanded our product lineup in response to an increase in thenumber of customers eating at home—as well as the continued strong sales of desserts.

LAWSONINTEGRATED REPORT 2021

0

1Q

2Q

3Q

2015

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

2017

2016

1Q

2Q

3Q

4Q

1Q

2Q

2018

3Q

4Q

1Q

2019

2Q

3Q

4Q

2020
(Fiscal year)

Growth rate of net sales of existing stores, average number of customers,
and average spending per customer*
2020

2019

2018

2017

2016

2015

Net sales of existing stores (YoY)(Fiscal year)

92.7%

100.1%

99.5%

99.9%

99.8%

101.4%

Average number of customers

85.8%

98.4%

97.7%

98.7%

99.0%

100.9%

Average spending per customer

108.0%

101.7%

101.8%

101.3%

100.8%

100.4%* The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.

69

Sales by product category (Consolidated, total net sales in Japan)*(Billions of yen)

2020

(Fiscal year)

2019

2018

2017

2016

Fast foods(share)

452.8

22.1%

523.3

24.1%

520.4

24.7%

484.9

24.5%

464.8

24.5%

Daily foods(share)

309.3

15.1%

307.3

14.2%

283.9

13.5%

268.0

13.5%

251.4

13.3%

Processed
foods (share)

1,096.3

53.4%

1,143.6

52.7%

1,107.3

52.6%

1,043.0

52.7%

995.3

52.6%

(Cigarettes)(share)

559.6

27.3%

559.1

25.8%

532.9

25.3%

498.6

25.2%

471.9

24.9%

192.1

9.4%

195.7

9.0%

194.2

9.2%

182.9

9.3%

182.1

9.6%

2,050.6

100.0%

Non-food
products(share)Net sales of all
stores (share)

Gross Profit Margin by Product Category* 1
The gross profit margin was 31.0%. This reflected an increase in the sales composition ratio of
low-margin products such as cigarettes, Western-style and chuhai alcoholic beverages, andentertainment lottery tickets, as their sales did not decline even during the COVID-19 pandemic.
These impacts were partially offset by improved gross profit margins in the fast foods and daily
foods categories due to efforts to improve the margins of original products.

Gross profit margin by product category (Non-consolidated)*1(Fiscal year)

2,170.0 100.0%

2,105.9 100.0%

1,979.0 100.0%

1,893.7 100.0%* The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.

2020

2019

2018

2017

Fast foods

39.2%

38.9%

38.2%

38.3%

2016

38.4%

Daily foods

34.6%

34.3%

34.0%

33.9%

34.0%
24.1%

Processed foods

23.2%

23.8%

23.9%

24.0%

Non-food products*2

49.7%

50.5%

50.3%

50.1%

49.1%

Gross profit margin

31.0%

31.3%

31.2%

31.3%

31.4%

Product categories
Category

Products included

Fast foods

Rice dishes, noodles, sandwiches, delicatessen items, over-the-counter fast foods, etc.

Daily foods

Bakery items, desserts, ice cream, fresh foods, etc.

Processed foods

Soft drinks, alcoholic beverages, cigarettes, processed foods, confectionery, etc.

Non-food products

Daily necessities, books, magazines, etc.

Third-party bill settlement services (Non-consolidated)*3(Fiscal year)

Bill settlements (millions of yen)
Number of transactions (millions)

2020

2019

2018

2017

2016

2,465,058

2,498,711

2,412,349

2,263,937

2,132,450

211.2

214.6

215.2

208.6

202.0

*1. The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.
*2. Gross profit margin of non-food products is calculated including commission income.
*3. The total of LAWSON, NATURAL LAWSON and LAWSON STORE 100 operated by Lawson, Inc.

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Corporate Information
Corporate Data As of February 28, 2021
Company name
Headquarters

Main Lawson Group Companies As of February 28, 2021

Lawson, Inc.
East Tower, Gate City Ohsaki, 11-2,
Osaki 1-chome, Shinagawa-ku,
Tokyo 141-8643, Japan
Sadanobu Takemasu

President and CEO,
Representative Director,
Chairman of the Board
Established
April 15, 1975
Capital¥58,506.644 million
Number of employees 10,385 (consolidated)

Business activities Franchise chain development of LAWSON, NATURAL LAWSON
and LAWSON STORE 100
Net sales for all¥2,349.7 billion (consolidated)
storesNumber of stores 18,261 (worldwide)
Operating areas All 47 prefectures in Japan, China (Shanghai and surroundingarea, Chongqing, Dalian, Beijing and surrounding area,
Shenyang, Wuhan, Hefei, Changsha, Haikou),Thailand,
Indonesia, Philippines, Hawaii

Notes 1: Net sales for all stores is the sum of total sales by the domestic convenience store business, overseas business and Seijo Ishii stores (consolidated subsidiaries only).
For the Seijo Ishii business, only the total for its Company-operated stores is included.
2: A mong the total number of stores, the number of domestic stores comprises LAWSON, NATURAL LAWSON and LAWSON STORE 100 stores operated by Lawson
Inc.; LAWSON stores operated by Lawson Okinawa Inc., Lawson Minamikyushu Inc. and Lawson Kochi Inc.; and Seijo Ishii stores operated by SEIJO ISHII, CO., LTD.
The number of overseas stores comprises stores operated under the LAWSON brand by companies in the respective regions.

Share Information As of February 28, 2021
Authorized shares409,300,000
Shares issued
100,300,000
Shareholders
31,317
Stock exchange listings Tokyo Stock Exchange (1st Section)
Stock transfer agent
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo,
Japan

Distribution of shareholders by type
Financial institutions

16.1%

Other domestic entities

55.0%

Number of shares
held (Thousands)

Percentages of
total shares held

50,150

50.1

5,119

5.1

2,886

2.9

2,110

2.1

2,092

2.1

1,433

1.4

7. Employee stockholding association

844

0.8

Custody Bank of Japan, Ltd.
(Trust account 7)

812

0.8

9. Japan Securities Finance Co., Ltd.

799

0.8

Custody Bank of Japan, Ltd.
(Trust account 5)

790

0.8

Shareholder name

1. Mitsubishi Corporation
The Master Trust Bank of Japan, Ltd.
2.
(Trust account)
Custody Bank of Japan, Ltd.
3.
(Trust account)
4. KDDI Corporation

8.5%

6.

8.
Securities companies

2.7%

Foreign entities

17.5%

Treasuryshares0.2%

10.

STATE STREET BANK WEST CLIENT—TREATY 505234*T he above percentages of total shares held were calculated after excluding 232,954
treasury stocks.

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71

Name of company

SCI, Inc
Lawson urbanworks, Inc.
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.
Entertainment-related Lawson Entertainment, Inc.
business
United Cinemas Co., Ltd.
Financial services
business
Consulting business
Overseas business

Major shareholders (Top 10)

5. NTT DOCOMO, INC.
Individuals, others

Category

Domestic convenience Lawson, Inc.
store business
Lawson Store100, Inc.

SEIJO ISHII business

Lawson Bank, Inc.

Consolidation status

Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Equity-method affiliate
Equity-method affiliate
Equity-method affiliate
Consolidated subsidiary(Consolidated subsidiary of Lawson
Entertainment, Inc.)
Consolidated subsidiary

BestPractice, Inc.
Consolidated subsidiary
Lawson (China) Holdings, Inc. Consolidated subsidiary
Shanghai Lawson, Inc.
(Consolidated subsidiary of Lawson(China) Holdings, Inc.)
Chongqing Lawson, Inc.
(Consolidated subsidiary of Lawson(China) Holdings, Inc.)
Dalian Lawson, Inc.
(Consolidated subsidiary of Lawson(China) Holdings, Inc.)
Beijing Lawson, Inc.
(Consolidated subsidiary of Lawson(China) Holdings, Inc.)
Saha Lawson Co., Ltd.
Consolidated subsidiary
SEIJO ISHII CO., LTD.
Consolidated subsidiary

Total shareholder return (TSR)

LawsonTOPIX total return

February 2017

February 2018

February 2019

February 2020

February 2021

92.0
120.9

86.1
142.2

86.3
132.2

76.3
127.3

69.4
161.0

Lawson Inc. was certified as a DX-Certified Operator under the
Digital Transformation (DX) Certification system provided by the
Ministry of Economy, Trade and Industry on August 1, 2021

Store Network Development As of February 28, 2021
Total number of stores(domestic and overseas total)*

18,261 stores

Number ofdomestic stores

14,640 stores

Main Businesses and Services As of February 28, 2021

Number ofoverseas stores

A convenience store that believes its
fundamental role is “Creating
Happiness and Harmony in Our
Communities” and operates in various
store formats to suit each community’s
characteristics.

3,621 stores

Operating companies

Operating company

Lawson, Inc.

Lawson, Inc.
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.
Lawson urbanworks, Inc.

Dalian 249 stores

Beijing 215 stores

A nearby store supporting “beautiful,healthy and comfortable“ lifestyles
based on the concept of “making themost of every day”.

Shenyang 78 stores

Based on the concept of a
“Menu-Support Convenience Store,”
Lawson Store 100 offers daily meals
centered on ingredients such as fresh
food items. We have also developed
the 100 Yen series mainly comprisingoriginal products.

Number ofdomestic stores

14,640 stores

Hefei 106 stores

A lifestyle supermarket for people whoare particular about food, providing
food from around the world at
reasonable world street corner prices.
Operating company

SEIJO ISHII CO., LTD.

Operating company

Lawson Store 100, Inc.

Chongqing 341 stores
Changsha 65 stores

Wuhan 441 stores

Haikou 23 stores
Thailand 140 stores

The farms are located nationwide,
producing fresh fruit and vegetables for
Lawson Group stores.

Shanghai 1,826 stores

Operating company

LAWSON Farm, a corporation eligible
for farmland ownership in respective
locations

Hawaii 2 stores
Philippines 67 stores

Provision of ticket sales services for a
full range of entertainment, includingmusical & sports events, theaters,
leisure facilities and cinemas, planningand sales of entertainment tours, salesof domestic tours, and planning andagency services for fan clubs, event
planning & production (sponsorshippromotions, investment promotions)and others.
Operating company

Lawson Entertainment, Inc.
A company selling music and movie
CDs & DVDs, books and related goods(through stores & e-commerce) as well
as planning and producing events andmuseum exhibitions in stores.
Operating company

Indonesia 68 stores

Lawson Entertainment, Inc.
A bank that provides financial services
such as savings accounts and credit
cards, as well as ATM services for cash
cards issued by financial institutions
throughout Japan at the ATMs in
LAWSON stores, etc. The bank has
also launched a service that enables
you to charge your smartphone apps
with cash at the ATMs.

* The number of domestic stores represents the total number of LAWSON, NATURAL LAWSON and LAWSON STORE 100 stores operatedby Lawson, Inc.; Lawson Okinawa, Inc., Lawson Minamikyushu, Inc., and Lawson Kochi, Inc.; and Seijo Ishii stores operated by SEIJO ISHII,
CO., LTD. The number of overseas stores represents the total number of LAWSON brand stores managed by operating companies in therespective regions.

Operating company

Lawson Bank, Inc.

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72

Operation of cinema complexes(multiplex movie theaters) offering not
only film entertainment but also such
enriching experiences as 4DX®
(experiential viewing) and various
contents other than movies.
Operating company

United Cinemas Co., Ltd.