Integrated Repor t
2023

Cr

ea

tin

gH

ap

pin

ess a

n d Harmony in Our Communities

2023 is the 48th anniversary of Lawson,Inc.
2025 will mark our 50th anniversary

Contents

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Selected contents
Introduction
P06

Message from the President

Creating
new forms of conveniences
on-siteValue Creation

Strategy

Index

01

The Lawson Group at a Glance (1)02

The Lawson Group at a Glance (2)03

Our Journey Creating Happiness in Our Communities

04

Message from the President

06

Community Happiness Creation Process

10

Materiality for Creating Happiness in Our Communities

12

Lawson Group Challenge 2025
Lawson Group Challenge 2025 Overview

14

Lawson Group Sweeping Transformation Executive Committee
Overview of the Lawson Group Sweeping Transformation Executive Committee 15

Feature:Machikado Chubo In-store Kitchens Project

P16►We want customers and franchise stores to know that our products are specifically for them

P25

Feature:Management Owner

P31

We aim to disclose information
to meets market need so that
we can be properly evaluated

P50

A Discussion by Outside Directors

Continue to question
the strategy andwill towards growth

16

Vendor Distribution Reform Project18

Customer-centric Supply Chain Reform Project19

Uniﬁed Use of Group Data Project / Group Branding Project

20

Business Portfolio►Making the convenience store into a desirable profession

Message from the CFO

Feature:Machikado Chubo In-store Kitchens Project

Sustainability

Corporate Governance

Finance /Company Information

Domestic Convenience Store Business

21

Feature:Management Owner

25

Seijo Ishii Business

27

Entertainment-related Business

28

Financial Services Business

29

Overseas Business

30

Message from the CFO

31

Non-financial Highlights

34

Lawson Blue Challenge 2050 !

35

Environment

36

Society

40

Executives

48

A Discussion by Outside Directors

50

Corporate Governance

52

Compliance and Risk Management

56

Eleven-Year Financial Summary

58

Industry Trends and Sales / Store Related Data

60

Corporate Information

64

Editorial Policy

6501The Lawson Group at a Glance (1) As of February 28, 2023

Net sales of allconvenience stores

ROE

2,545.4
8.9

Introduction

Operatingincomebillion yen
ROA

%

55.0
1.8

Value Creation

Strategy

Profitper share

billion yen
Payout
ratio

246
60.8

%

679 stores

5,620 storesTohokuThailandFinance / Company Information[Domestic 14,806 stores]
Hokkaido

China

Corporate Governanceyen%[Overseas 6,160 stores]

Sustainability

Philippines

181 stores

101 stores

Hawaii

ChugokuIndonesia

256 stores

Koshinetsu

2 stores

KyushuHokuriku

527 stores

1,396 stores

Seijo Ishii (directly managed stores)

175 stores

383 stores
Kanto

945 stores
Tokai

4,682 stores

1,306 stores

2,659 stores
Shikoku 624 stores
Kinki

1,171 stores

Okinawa

259 stores

02

The Lawson Group at a Glance (2) As of February 28, 2023

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Financial services businessEntertainment-related business72.1billion yen

In addition to ticketing businesses such as Lawson
Ticket and Lawson Travel services, and merchandise
sales businesses such as HMV stores and e-commerce,

34.4 billion yen

Besides operating ATMs using LAWSON Bank ATMs
installed at LAWSON stores and other locations, the
LAWSON Group has retail services including deposits
and credit cards.

the Lawson Group operates a cinema complex business.

Overseas business92.1billion yen
The LAWSON Group opens Japanese-style convenience stores throughfranchising in China, Thailand, Indonesia, the Philippines, and the U.S.
state of Hawaii.

Seijo Ishii business109.5 billion yen
A lifestyle supermarket for people who are particular about food,providing food from around the world at reasonable prices.

Gross
operating revenue

988.6
billion yen

Domestic convenience store business691.3 billion yen

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

03

Our Journey Creating Happiness in Our Communities

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Lawson’s responsiveness to change, carrying on an unbroken line
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 component of infrastructure in the society.
To ensure its position as an essential part of the community that provides support for residents,
Lawson is determined to continue pursuing and advancing the “hub of refreshment in every community” from the customer’s perspective.

Notable/Major Events(business)

1975

1986

1996

1998

Opened the first Lawson store
in Sakurazuka, Toyonaka, Osaka

Launched KARAAGE-KUN Fried Chicken

Launched Lawson Ticket service

Introduced Loppi multimedia terminals
to all stores

1989

1996

Started 24-hour/day operations

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

Opened the first overseas store
in Shanghai, China

1983

1991

1997

2000

Started copying
and printing services

Started third-party bill settlement services
for the payment of telephone and water bills

Realized Lawson’s presencein all 47 prefectures of Japan

Formed a business alliancewith Mitsubishi Corporation

1977

1994
5,000 stores

2000
Opened first convenience store
inside a hospital, Hospital LAWSON

Number of stores1975
1 storeHandyman in the community

Lawson as social infrastructure

Contribution to solving social issues

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

Notable/Major Events(environmental,social services)

1975

1983

1992

1997

1999

• Opened Station Park Waseda
experimental environment and welfare store• Established the LAWSON Green Town Fund(currently LAWSON Green Fund)• Started the food waste recycling system• First convenience store to introduce
low-environmental pollution delivery vehicles
using CNG

Stopped including chopsticks, spoons,and forks in boxed meals

1995

1998

Collected donations for rescue work
after the Great Hanshin-Awaji Earthquake

ISO 14001 certification(shifted to the operation under a voluntary environmental
management system in December 2019)1989

Commencement of
Sea of Japan Earthquake Era name change (from Showa to Heisei)/
the Shinkansen service to Hakata
Introduction of consumption tax

2000
Started Mt. Fuji forest improvement project

1991

1995

1997

Gulf War/Collapseof Japan’s bubble economy

Great Hanshin-Awaji
Earthquake

Consumption tax increase: 3% to 5%04

Our Journey Creating Happiness in Our Communities

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

As of February 28, 2023

14,806 stores

2001

2010

2014

2018

2019

Started automated teller machine (ATM) service

Launched the coalition loyalty program Ponta

Acquired supermarket chain
Seijo Ishii Co., Ltd.

Lawson Bank Launchedthe operation of Lawson Bank, Inc.

Introduction of delivery service,
started tie-up with Uber Eats

2010

2001

Established the LAWSON Farm

Opened first NATURAL LAWSON store

2011

2003
Established post boxes
in LAWSON stores nationwide

2011
10,000 stores

2014

2018

2019

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

Introduction of the LAWSON
smartphone cash register system

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

2015

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

Opened first care-focused LAWSONwith nursing care consultation desks for seniors

2018

2021

Introduction of POS cash registers
with automatic change dispensers

Start of renovations for ideal store format(Sweeping Transformation Executive Committee measures)

2005

2011

2017

2022

Opened first LAWSON STORE 100 store

Started operation of Machikado Chubo
in-store kitchen

Nationwide rollout of one of China’s
largest settlement services, Alipay

Lawson Go walk-through cashless
payment stores
Number of stores

To meet a wide variety of needs

Building stores meeting community needs

Expansion of business categories and services

Full-fledged efforts towards Health, DEI (Diversity, Equity & Inclusion), and SDGs

2003

2011

2015

• First comprehensive regional agreementwith municipal government (Wakayama Prefecture)• Opened the first store offering prescription medicines

Set up Support Dreams Fund(scholarship program for victims of
the Great East Japan Earthquake)

Selected for the 2015 Health & Productivity Stock Selection • Established the SDGs Committee(fourth time in total: 2015–2017, 2021)• Formulated the Lawson Blue Challenge 2050 ! environmental vision

2006

2012

Started recycling waste oil in all stores

Launched bran bread that contains grain husks

2016

2019
2020

Obtained the Resilience Certification

Provide onigiri (rice balls) at no cost to after-school childcare
facilities nationwide, in response to the pandemic

2022

2008

2014

2017

• Opened first eco-friendly model store• Set own action targets for reducing CO2 emissions

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

Set up Support Dreams Fund
• Installed pointing sheets with the Ear mark label at cash registers(scholarship program for children from single-parent families) • Opened the futuristic Green Lawson (future format stores) stores

2005

2008

2011.3.11

2014

2015

2016

2019

2020

The Kyoto Protocol
took effectGlobal financial crisis

Great East Japan
Earthquake

Consumption tax
increase: 5% to 8%

Adoption of
the SDGs

The Paris Agreement took effectConsumption tax
increase: 8% to 10%

Spread of COVID-19

05

Message from the President

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Creating
new forms of conveniences
on-siteSadanobu Takemasu
President and CEO, Representative Director,
Chairman of the Board

Taking a hands-on approach
We cherish the Group philosophy of “Creating happiness and harmony in our communities,” which forms thefoundation of the Lawson Group. Amid unprecedented social change caused by the COVID-19 pandemic in 2020,
we have returned to the starting point of what the Lawson Group can do to create happiness and harmony inour communities. We have been pursuing new conveniences during the pandemic by responding promptly to thedrastically changing needs of our customers.
In our franchise business of convenience stores, franchisees are an important factor. To achieve sustainablegrowth, our franchisees must be profitable. Prior to COVID-19, we emphasized member store profits under our“franchise store profit-focused management” policy, and we added franchise store profits to the company-wide KPI(our Head Office employee evaluation index). Despite declining store sales during the pandemic, we maintained thepolicy. Through the combined efforts of headquarters and franchisees, the franchisee profit per owner continued to
grow in fiscal 2022—as it did in the previous year—even exceeding the pre-pandemic level of fiscal 2019.

06

Message from the President

Since becoming president, I have emphasized a hands-on approach. Each year I visit about 500 storesnationwide. I have also visited stores during the pandemic to talk directly with customers, owners, store managers,
and store crews, and to confirm store operations on-site. I try to make decisions from an on-site perspective, so that
discussions at headquarters take account of what is happening out there in our stores.
Our goal is to provide new forms of conveniences that change with the times, while keeping happiness andharmony in our communities at the core.

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Evolving our concept of“community-based × individual customer and individual store-focused”
Our customers will appreciate our efforts to achieve the Lawson Group Challenge 2025. Through the Challenge,
we offer safe and reliable products that bring a new forms of convenience and a sense of excitement to people’s
daily lives.

Traditionally, the role of a convenience store has been to offer food and beverages to people on the go in the

For Lawson to become a truly convenient part of daily life, we need to do things like respond to regional variations

morning and at lunchtime. Before the pandemic, a campaign was launched to offer family dinners and packed

in food culture. We need to provide products with flavors appropriate to each area—for example, soy sauce-basedlunches for the next day, with the goal of boosting sales in the evening and night hours. This campaign did not

products in Tokyo and dashi-based products in Kansai. This is what we mean by being community-based.

achieve the results we hoped for.

To promote community-based operations, we expanded the area company system in March 2023. The system

Customers’ purchasing behavior has changed with the pandemic. Customers told us that supermarkets were

now covers eight areas nationwide, including Hokkaido and the Kinki region, where we originally rolled out theoften far from their homes and were crowded. They told us they liked having a Lawson store nearby selling tofu,

system. By delegating authority and functions from the headquarters to local stores, we are increasing the degree

milk, bread, and other daily items. As customers’ lifestyles have changed, the new forms of convenience they seekof management autonomy in each area.

from convenience stores has shifted to meet their daily demands. In other words, we can increase the opportunities
for our customers to use Lawson by responding quickly to their needs.

Franchise store owners have responded favorably. They say that they feel closer to the head office and thatpolicies are getting developed faster. By implementing the PDCA cycle closer to customers, we are furthering theconcept of individual customer connecting with individual stores.

Signs of change
To respond to these changes, we launched the Lawson Group Sweeping Transformation Executive Committee

Area Company System Nationwide Expansion

Product and Sales strategy

in September 2020 and have been working on pursuit of ideal store format and product renewal. We added morefixtures to bolster our lineup of frozen foods and daily-delivered foods. And we introduced in-store kitchen facilities
to create an environment that enables us to serve store-cooked rice.
As a result, customers can visit us as part of their daily lives. In fiscal 2022, sales of rice balls and beverages, which
are sensitive to flow of people, had not yet recovered to pre-pandemic levels. But sales of daily-use products—such

Eight areas
nationwide

Kitakanto
Company

as frozen foods, daily-delivered foods, and daily necessities—have exceeded pre-pandemic levels. Finally, the flowof people has recovered in earnest. Along with the increase in daily-use demand, we expect an increase in demand
among our on-the-go morning and afternoon customers.
We are also keen to meet the demand for our delivery services. We want to have a system that covers bothconvenience and daily demand at our physical stores, while also offering the fastest delivery service to meet ourcustomers’ demands. As of May 31, 2023, delivery services were offered by 3,676 of our stores. For both in-personcommerce and e-commerce, we are aiming to become the most convenient Lawson we can be.

Strengthening product appeal andsales floor execution as
we aim for ultimate chain-store management.

Hokkaido
Company

Chugoku-Shikoku
Company
KyushuCompany
Kinki
Company

TohokuCompany

ShutokenCompany

Products

Product

Stock

Delicious taste

Ample
ranges and volumes

Pursuit

Improve execution

Chubu
Company

07

Message from the President

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

At the same time, we still need to offer the products that customers expect from Lawson as a national chain. We

In our Entertainment-related business, our ticketing business has the largest play guide market share, and ourare part of the social infrastructure. As such, in fiscal 2023 we will create sales floors that focus both on the breadthcinema complex business has the third-largest number of theaters in the industry. The ticketing business is tightlyof the product lineup and on the volume of stock. The goal is to offer what is best for the local community and theconnected with travel, and we are looking to expand the travel domain through M&A and alliances. We are taking on

customers who live there.

the challenge of becoming a comprehensive entertainment distribution company.

Comprehensively strengthening the sales floor will enhance the effectiveness of our new ordering system, AICO,
which is scheduled for a full launch in fiscal 2024. This system forecasts demand for each product based on dataIn our Financial services business, we are working to build new services by taking advantage of the businesssuch as weather conditions and previous sales at each store. By providing accurate recommendations for orderenvironment in which around 5 trillion yen is settled annually at Lawson stores in the form of merchandise sales andvolumes and price discounts, it will help to improve sales and gross profit margins. We believe that this initiative will

third party bill settlement services. We are considering developing ATM business and launching new retail business.

improve convenience for customers and enhance the sense of security as a chain and community-based appeal.
By preparing a foundation that can meet the demand for convenience and daily necessities, the convenience store

Regarding our Overseas business, we believe that we are in a significant growth stage in China. As of May 2023,

can become a supply center for daily commodities even in areas with a declining local population. Convenience

we had 5,788 Lawson stores in China and we reached 6,000 stores in August. Our goal is to reach 10,000 storesstores can thrive even in business areas with a population of 2,000.

by 2025. Considering that China’s population is more than 10 times the size of Japan’s, 10,000 stores is merely a

We believe the time will come when customers will meet their weekday shopping needs through convenience
stores and e-commerce, and they will visit shopping centers and supermarkets only on weekends. To promote daily
use of not only foodstuffs but also daily necessities on weekdays, we introduced MUJI products on a full scale frommilestone.
We intend to expand the number of our stores in the Philippines, Thailand, and Indonesia, and to simultaneously
invest in growth and have a return on investment over the next five to ten years.

May 2022. If we can expand our wallet share by supporting the basics of daily life, growth is possible even in thedomestic convenience store market, which is said to be saturated.

Background of Enhanced Shareholder Returns
Growth of Group companies

In the Lawson Group Challenge 2025, our medium-term management vision, we have set an ROE of 15% or more
and an EPS of 500 yen or more as target indicators. Each segment business is promoting action plans to achieve

In the Seijo Ishii business, the Yamato No. 3 Central Kitchen, which started operation in July 2022, has doubled

these targets. After reducing dividends in fiscal 2019 to strengthen support for franchisees, we were able to increase

its capacity for product manufacturing. By making optimal use of the new central kitchen, we will develop products

franchise store profits and recover Lawson Group sales and profits by focusing on our “franchise store profit-focusedand services that are unique to Seijo Ishii and accelerate the opening of new stores in each area, including western

management” policy and by responding to changes in COVID-19. In addition to these factors, as we now see a clear

Japan. We are also considering overseas expansion.

path for growth through fiscal 2025 as a result of the implementation of the action plan, we have decided to increase
dividends starting in fiscal 2023.

08

Message from the President

Introduction

Sustainability Initiatives and GovernanceValue Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Aiming to be the No.1 recommendation

ESG-focused management is also an important issue for us, along with the target indicators of the Lawson Group

Under the Lawson Group Challenge 2025, we aim to become the most recommended brand among customers,

Challenge 2025. We have set forth our environmental vision, Lawson Blue Challenge 2050 ! , and are promoting

society, and peers by creating and offering new conveniences. In the three years following the outbreak of COVID-19,

a variety of initiatives to address environmental issues. We are also working on other initiatives, such as Diversity,

we have established a group-wide system that allows us to respond quickly to change. This includes launching theEquity & Inclusion (DEI).

Lawson Group Sweeping Transformation Executive Committee in September 2020 and introducing the area company

Specifically, doors have been installed on 80% of the refrigerated/freezer showcases at model stores, alongwith solar power panels. Proof-of-concept experiments have been conducted to the goal of reducing electricity

system. We have also been increasing the degree of management autonomy. We are confident that the Lawson
Group’s efforts have been well received by our customers.

consumption by 40% and CO2 emissions by 55% compared to fiscal 2013.
We will continue to develop initiatives that will be supported by all stakeholders, including customers, society,business partners, franchise store owners, store crews, employees, and shareholders. And we will continue touphold our Group philosophy of “Creating happiness and harmony in our communities.” Our wish is to be a company
that brings happiness to our communities.

Avatar customer service

Refrigerated case with door

At our next-generation Green Lawson stores, we have introduced an avatar customer service. We are conducting
a demonstration experiment to remotely explain the operation of the self-checkout system and provide information
on various products and services. This system will enable people who are unable to work at stores in person to play
an active role. And if one person can work at several stores at the same time, this will also help to solve the labor
shortage.
It is important to have strong governance to bring about ESG-focused management and to achieve the target
indicators of the Lawson Group Challenge 2025. Two of Lawson’s five directors are independent outside directors
and three of its five auditors are independent outside auditors. In addition, a special committee has been established,with all five members consisting of independent outside directors and independent outside corporate auditors. The
outside directors and outside corporate auditors play a supervisory and auditing role and discuss management andbusiness issues from their expert perspectives.

09

Community Happiness Creation Process

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Input
Operating Capital

Financial Capital

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

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

14,631 stores
131 stores
661 stores
345 stores•

NATURAL LAWSON•LAWSON STORE 100•

Hospital LAWSON•Stores with nursing care consultation
desks for seniors•

Stores that sell over-the-counter
pharmaceuticals

20 stores
298 storesEntertainment-related business
•

HMV

•

UNITED CINEMAS

55 stores
399 screensFinancial services business Lawson ATMs
Overseas business

Interest-bearing debt

13,519Human Capital
Employees, who are the most important capital for realizing happiness in our communities
and advanced store productivity
Consolidated employees

6,160 stores

10,648 people

Selection as a Health and Productivity Management Brand 4 times
Certified Health & Productivity Management Organization 7 times
Nadeshiko Brand Selection

Intellectual CapitalSocial and Relationship Capital

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

Customers, involved in the happiness of our communities
Total number of visitors to Lawson stores per day (domestic)

Ponta membership
Approximately 113.78 million people(As of the end of July 2023)•

6 times

Approximately 10 million

Digital technology

Group ID•

339.3 billion yen

175 stores

Seijo Ishii business

Domestic convenience store business271.2 billion yen

Lawson online members*
Approximately 27.5 million people•

Self-checkout registers
All stores•

LAWSON Smartphone Checkout service

107 stores*Lawson online members is a membership service offering access to Lawson Group services such as HMV and L-Tike.

Natural Capital
Food resources for remaining close to our customers
Established

16 LAWSON Farms

10

Community Happiness Creation Process

Strategies for Growth1

Introduction

Strategy

Sustainability

Lawson Group Challenge 2025

Recognize, review, and explore community’stransitions and challenges
Business model

2(1)Store network
Overseasbusiness

Domestic and international multi-format expansion

Seijo Ishii
Business

Domestic
CVS

Core
competence

Maximize the value ofthe Lawson brandFinancial
Services
Business

Entertainmentrelated
business(2)O2O
Optimize local people/
consumer touchpoints(3)Data
integration
infrastructure
Analysis based onmembership information
utilizing group IDs

3

Give contribute to
the community

Provide new values

OutputOutcomeDomestic convenience store businessSocial value• Community based × individual customer
and individual store-focused• Provide products and services suited to the
local area and the business environment of
individual stores• Stores well-established in the local
community
Seijo Ishii business• Offer distinctive, high-quality products• Provide entertainment through ticketingand cinema complex businesses

New conveniencein practice• Products and services responsive tocustomer feedback• Sustainable joint ventureswith franchise stores• Provide social infrastructure
Results Consolidated results for fiscal 2022
• Gross operating revenue• Operating income

Financial services business• Develop and offer new retail bank services

988.6 billion yen
55.0 billion yen• Profit attributable to owners of the parent• Dividend per share[A Management Foundation for Creating Happiness in Our Communities]

Corporate governance, internal control, sustainability management

Finance / Company Information

New hubs ofrefreshment inevery community

Entertainment-related business4

Corporate Governance

Our Vision (Goals)

Develop products and services
fulfilling community needs

Business that responds to change

Input

Value Creation

24.6 billion yen
150 yen

LawsonBlue Challenge 2050 !
• CO₂ emissions

Reduce by 100%Per store 2013 levels

Job satisfaction

Spirit of challenge[Group Philosophy]

Creating Happiness and Harmony in Our Communities

Overseas business• Food waste

Reduce by 100%Per store 2018 levels• Japanese-style convenience stores overseas• Providing products and services tailored to thatcountry’s culture• Containers and packaging of
Lawson’s original products
Eco-friendly materials 100% used11

Materiality for Creating Happiness in Our Communities

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Contribution to the Sustainable Development Goals (SDGs)

Identification of material issues (materiality)

Lawson Group’s approach to contributing to the SDGs

issues we have identified that have heavy impacts on the environment, society, and the economy. We compared the

The three promises, a policy based on our Group philosophy, is the foundation of our business and the basis for

The Lawson Group believes that striving to realize the Three Promises to become the hub of refreshment insocial impact (impact level) expressed in stakeholder opinions with the impact on Lawson, and identified Lawson

every community based on its Group Philosophy, “Creating Happiness and Harmony in Our Communities,” ultimatelymaterial issues (materiality) that must be prioritized for us to become a hub of refreshment in every community. We

promotes the Sustainable Development Goals (SDGs). With this in mind, we are working proactively to solve social

will work on these material issues (materiality) toward the future ideal for Lawson.

issues.

Aiming to realize a sustainable society through our business activities, we have been working to establish systems
for solving social issues and implementing PDCA cycles for them, including the establishment of an SDGs Committee
in March 2019.
From March 1, 2021, the Company established the position of Chief Sustainability Officer (CSO), with the president,CEO, and representative director appointed to the position to further strengthen initiatives. In responding to the issues,
the SDGs Committee identifies material issues that align with the Three Promises, and periodically shares the progressof 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

Impacts of identified social issues
Large

Impact on Lawson (impact level)

Establishing systems for contributing to the SDGs and implementing PDCA cycles

key issues that require a quick response; namely, CO2 emissions reduction, food waste reduction, plastic reduction,
supply chain expansion, and information disclosure.

 istribution of safeDand secure products

Job satisfaction reform

Audit & Supervisory Board

CSO (President and CEO)Management meeting

SDGs Committee

Declining labor force

Super-aging society

Issues of 24-hour operation

Diversity of human resources

Plastic waste issues

Progress of technological innovation

Changing role of the family in society

Massive use of natural resources

Water pollution/shortage
Superior taste
Human kindness
Environmental (Machi) friendliness ecline and depopulation in local
D
communities

Increasing health consciousness

Deterioration of ecosystems

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

Medium

Impact on Society (impact level)

Large

Steps to identify material issues (materiality)
https://www.lawson.jp/en/csr/environmental_management/

Signing the UN Global Compact
Lawson signed the United Nations Global Compact in May 2022 and will
Working groups

contribute to the development of a sustainable society by supporting and practicing

CO2 emissions reduction

the ten principles in the four areas of human rights, labour, environment, and anticorruption.

SDGs Promotion Group Meeting(Held on a quarterly basis: general managers and higher)

Declining birthrate

Food loss

MediumSecretariat
SDGs Promotion Office(Held on a quarterly basis: Includes directors from divisions associated with sustainability)

Compliance

Intensified climate change

Development of a stable supply chain

SDGs Committee Organization (as of March 1, 2023)
Board of Directors

Large-scale disasterFood waste reduction

Under our Group philosophy, we will earnestly consider what we can do for our

Supply chain expansion

customers, our communities and the Planet and actively take on the challenge ofresolving medium- and long-term issues involving the environment and society.

Plastic reduction task force

Information disclosure

12Materiality for Creating Happiness in Our Communities

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Material issues (materiality)
Material issues

1

VisionProviding Safety/Security-oriented, Extremely High Value-Added Products
and Services that are Friendly to Society and the Environment

Aiming to be hubsof refreshment
in every community

Promise 1

Surprise “Whew!” discoveries for
products and services

Superior
taste

Synergize the three promises toachieve our vision

Group Philosophy

Promise 2

Clean stores with welcoming
customer service

Humankindness

Creating Happinessand Harmony
in Our Communities

Material issues

2

Supporting health promotion for3
all people through products and stores

Promise 3

Environmental(Machi)friendliness

Reducing food waste,plastic use, CO2 emissions

Material issues
Providing comfortable work environments
4leading to job satisfaction

Supporting empowerment of womenand seniors, as well as children’s growth5

Coexisting synergistically with communities
by serving as part of the social infrastructure

6

Sustainable environmental conservation activities
toward the realization of a carbon-free society

For more information about material issues (materiality)
https://www.lawson.jp/en/csr/promotion/13

Lawson Group Challenge 2025 Overview

We’re striving to achieve sustained growth by fostering the evolution of
the initiatives of the Lawson Group Sweeping Transformation Executive Committee
while building on the foundation laid by past measures.

Introduction

Value Creation

Lawson Group Challenge 2025

2021-20222020
2017-2019
Active IT investment
Next-generation systems
Adopting automatic change-dispensing POS registers andnew store computers and tablets at all storesFranchise store profit-focused management
The headquarters takes responsibility for
maintaining franchise store profits
Navigating abrupt changes in customers’ andsociety’s values as a result of the pandemic.

Creating a basis for new ways of convenience toaccommodate post-pandemic life

Strategy

Sustainability

Corporate Governance

Finance / Company Information

2023-2025
New hubs of refreshment
in every community
New convenience in practice

Improving store display hardware
Enhancing in-store kitchens, frozen foods, and delivery service

Lawson Group
Sweeping Transformation Executive Committee(Short term: Daily sales improvement)

Lawson Group
Sweeping Transformation Executive Committee(Medium and long term)• Pursuit of ideal store format project• Machikado Chubo in-store kitchens project• Product renewal project• MUJI introduction project• Customer-centric supply chain reform project• Vendor distribution reform project• Unified use of Group data project• Pursuit of ideal store format 2.0 project and other projects

Launching the Lawson Group
Sweeping Transformation Executive Committee

Fiscal 2017 to fiscal 2020: Laying a new foundation
From fiscal 2017 to fiscal 2019, we made active IT investments in an effort to address labor shortages caused by

Fiscal 2021 onward: Implementing new ways of convenience andrealizing new hubs of refreshment in every community

the shrinking of the working age population and to further streamline store operations. In fiscal 2017, we introduced

We formulated the Lawson Group Challenge 2025 in fiscal 2021 to prepare for 2025, the 50th anniversary of our founding.

tablets for managing stores’ work schedules in order to put in place an environment in which store crews could do

The initiative strives to put into practice our Group philosophy of “Creating Happiness and Harmony in Our Communities”

their jobs in a consistent and uniform manner, and by fiscal 2019, we had introduced automatic change-dispensing

by ensuring we’re the No. 1 recommended business in our industry by customers, society, and partners (franchise stores,

POS registers so that foreign and newly hired store crew members could easily operate registers.

employees, and other stakeholders) alike and creating new hubs of refreshment in every community in the pursuit of new

In fiscal 2020, when the business environment changed dramatically as a result of the pandemic and store

ways of convenience. To realize new ways of convenience, we launched the Lawson Group Sweeping Transformation Executive

sales were falling, we responded by embracing an approach to management that focuses on franchise store profit,

Committee, which is undertaking a variety of initiatives centering on the three promises of our business policy: “Superiormoving quickly to implement a thorough slate of pandemic-related measures at stores while offering headquarters

taste,” “Human kindness,” and “Environmental (Machi) friendliness.” The committee, which is chaired by the president toassistance to low-revenue stores. By focusing on ensuring an environment in which franchise stores could operate

ensure it can function in an agile manner, is carefully managing progress by setting milestones for individual projects.

with peace of mind and on orchestrating a recovery in sales, we were able to maintain franchise store profit on

During fiscal 2021 and fiscal 2022, we achieved results by implementing initiatives to make daily sales improvements;

par with the previous fiscal year. Furthermore, we launched the Lawson Group Sweeping Transformation Executive

for example, through the pursuit of ideal store format project and implementation of the Machikado Chubo in-store kitchens

Committee in September with the goal of realizing growth in the new business environment and launched a series

project. Since fiscal 2023, we’ve been steadily implementing a series of medium- and long-term initiatives, includingof initiatives to give shape to a Group-wide growth strategy.

adopting a next-generation order system and distribution system based on two daily deliveries, reducing food waste
and CO2 emissions by the pursuit ideal store format 2.0 project (for example, by installing doors on open cases), andundertaking human resources program reforms.

14

The Lawson Group Sweeping Transformation Executive Committee

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Overview of the Lawson Group Sweeping Transformation Executive Committee
Committee chair: Sadanobu Takemasu, President and CEO, Representative Director, Chairman of the Board and CSO*
Pursuit of ideal store format

Transforming
store displays

Transforming
profit structuresand productivity

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

Improving profitability offranchise stores,
headquarters and operatingcompanies by reviewing costs
and striving to increase revenue

Transforming worker
motivation, etc.

FY

Machikado Chubo in-store kitchens

Introduce into more stores, renew menus

Product renewal

Expansion of daily and frozen foods anddelicatessen products

MUJI introduction

Introduction of MUJI products

2023-FY2024

Realize
the new CVS modelat stores

The No.1 recommendation acquiring

Improving to products and service level(ensuring that we’re the No.1 recommended business in our industry by customers, society, and partners)

Customer-centric supply chain reform

Design of optimal supply chains

Optimization of vendor structures, strengthening of product appeal, establishment of an optimized shipping system,and establishment of a refrigerated distribution model and expansion of its coverage

Unified use of Group data

Infrastructure development

Expansion of a marketing business utilizing data and owned media

Pursuit of ideal store format 2.0

Environmentally-friendly stores and efforts to
reduce electricity use and labor requirements

Internal structure reform

Development of lean headquarters structures

Franchise model reform

Establishment of a new,sustainable franchise modelWork motivation reform
Store crew motivation

Realizing
new ways of
convenience

Orchestrating a leanGroup transformationand ensuring a solid revenue base

Improvement of the Group’s brand value
Policies to support employees who embrace challenges and improvement of store crew motivation

Personnel system reform

Human resource program reforms placing job-and
performance-based employment in its core, development ofmanagement personnel training base, work motivation reform

50th anniversary executive

Planning and implementation of events and communications
befitting the 50th anniversary of the company’s founding

Operating companies

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

Investments in Group growth(operating companies)

Incubation business(delivery, etc.)
Group businesses(Seijo Ishii, Entertainment, Financial, Overseas)

Pursuit of SDGs

Contributing to the Sustainable
Development Goals (SDGs)

Pursuit of SDGs

*CSO: Chief Sustainability Officer

2025

FY

Introduction of a new semi-automatic ordering system

Vendor distribution reform

Group branding
Continually reforming motivating
factors for all franchise store,
headquarters, and Group
company employees

2022

FY

Refurbishment of store displays
and introduction of new fittings

Group businesses(Seijo Ishii, Entertainment, Financial, Overseas)

Reduction of CO2 emissions, plastic use, food waste, etc.

Improving employee satisfaction
at the Lawson Group

Growth of all operating companies

Realizing a sustainable society
through business activities
15

Sweeping Transformation Executive Committee Projects

FeatureTransforming Store Displays

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Machikado Chubo In-store Kitchens Project

We want customers andfranchise stores to know thatour products are specificallyfor them
General manager of daily foods and in-store kitchen dept. ,Merchandising division

Fumiki Mizushima
As of the end of fiscal 2022, approximately 9,200 stores had introduced the Machikado
Chubo in-store kitchens, which provide freshly prepared in-store bento (boxed meals) andsandwiches that are now among Lawson’s signature products. What is the reason for theirsuccess? We asked Fumiki Mizushima, the general manager of Machikado Chubo.

C hic

Focusing on the taste of store-cooked ricek e n K a r a- a ge(Frie d C hic
ken

)B
en

charge of the Machikado Chubo in-store kitchens since 2019 and was in
the midst of trial-and-error efforts when the spread of COVID-19 cleared
the streets of people.

toMizushima, a 20-year veteran of product development, has been inalternative to eating out. When franchise stores told us how helpful this
was, we were convinced that this could turn crisis into opportunity.
“The first hit product of Machikado Chubo was the Thick Pork Cutlet
Sandwich. It takes time and effort to make, but it is a dish that conveys“Sales of onigiri rice balls and bento (boxed meals), which had been

the deliciousness of freshly fried pork cutlet straight to your taste buds.

stable every day, became unpredictable, and waste loss became a

In 2021, we also collaborated with famous restaurants such as Maisen,

serious problem. This was a big problem for our franchise stores. But

which is renowned for its pork cutlets. In 2022, we added Chicken Kara-

with Machikado Chubo in-store kitchens, which allow on-site cooking,age Bento (boxed meals) and Thick Pork Cutlet Bento to the existing menu

managers can decide whether or not to make the food on a particularof rice bowls to make people understand how delicious in-store cookedday. Since rice cooked in the store is served on the spot, it can be anrice can be.”16

Sweeping Transformation Executive Committee Projects

Featurec

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information“We are particular about the taste of rice. We previously used one

There is a noticeable difference in taste between rice that has been allowed

variety of rice nationwide, but now we have divided the country into six

to sit after cooking and rice that has been freshly cooked in the store. This

blocks, with each serving the rice that people in that region know anddistinction in taste is clearly apparent even with fried food. It is such added

Machikado Chubo in-store kitchens have already been implemented

love.”

value that comes from in-store cooking that Mizushima is pursuing within approximately 9,200 stores. Installation of kitchen facilities is almost

Machikado Chubo in-store kitchens.

complete, except for those stores located in narrow buildings or in train

Environmentally friendly, reduces waste

and Koshihikari from Niigata in the Kanto area. Products made with locally-“For instance, when it comes to onigiri (rice balls), factories excel in terms

stations where there is insufficient backroom space. Average sales

produced rice recorded significant growth in sales, especially in regions likeof productivity. We carefully evaluate the difference in taste and the quality of

per store has doubled compared to fiscal 2019, and we foresee it

Hokkaido, where they were introduced early on.

service between factory production and in-store cooking, and examine thequadrupling in the future.

“Both customers and member of franchise stores saw the products

unique value of each in depth. The value of Machikado Chubo in-store kitchens“The initial expansion scale should be about 10,000 stores. Goingas something customized for them. Convenience stores operate as alies in the delicious, freshly cooked products made in-store. This serves as

forward, we intend to focus on expanding the business area of individual

business in partnership with franchisees, so it is important that they feela differentiating factor from other chains and benefits our franchisees.

stores by increasing delivery and mobile ordering (cooking after receiving

an attachment to the products. Since they cook these products themselves

Particularly crucial is cooking the rice in-store. We will not deviate from thisthe order).”in the store kitchen, they naturally feel a strong connection to them. The

fundamental principle.”products become big sellers and the stores feel proud of them.”

Ma

Introduction

Machikado Chubo In-store Kitchens Project

For example, Fukkurinko is used in Hokkaido, Akita-Komachi in Tohoku,

hiTransforming Store Displays

k

o
ad

C h u b o p r o d u ct s
in a s tore

In response to Mizushima’s aspirations, many requests have beenThis will not only propel business but also contribute to improving theenvironment and society.

received from franchisees for specific improvements. The biggest difference“The shorter time from food preparation to sale allows for the use

in developing Machikado Chubo in-store kitchens and other products is theof fewer additives and significantly reduces waste when compared tostrong commitment from franchisees to improve products through their own

making food in factories. It may be a solution to the long-standing issue

efforts.

of wasted bento boxes. We believe that Machikado Chubo is friendly“For example, with the popular pork cutlet sandwich, it takes time for store
crew to become skilled at making it. While looking for ways to offer it faster,

to both the community and the environment and benefits everyone
concerned.”a franchisee suggested that we use the giant pork sausages sold as counterfast food: if you fry the sausage, place it in the bun, and pull out the skewer,
anyone can quickly make a hot dog. This is how products have started toemerge thanks to franchisee input.”
Multiple menu items can be created from a single ingredient, and kara-age
can be used both as a side dish and in bento boxes. If we can achieve thisflexibility to meet demand at any particular time, it not only improves revenue
but also reduces the cost burden for franchisees, who face the challenge oflabor shortages.
“As labor shortages resurge in the post-pandemic era, a product improvement like the aforementioned hot dog example is one way of streamlining the cooking process to improve efficiency. However, that alone is not
sufficient. Currently, we are working on implementing systems such as multilingual manuals to ensure that even store crew who are not proficient inJapanese can create products for the Machikado Chubo in-store kitchens.”

17

Sweeping Transformation Executive Committee

Transforming Profit Structures and Productivity

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Vendor Distribution Reform Project

Establishment of an optimized shipping modelTransition to two daily deliveries of chilled and temperature-controlled products

Optimizing vendor structures and strengthening product appeal
We’re optimizing vendor structures in order to strengthen product appeal and maintain stable supply structures.

From December 2023 to March 2024, we will progressively change the number of shipments to stores of

In addition, we acquired a 10% stake in NC·GD Holdings Co., Ltd., which was established as the parent company ofchilled and temperature-controlled products [including bento (boxed meals), noodle products, prepared foods, andGourmet Delica Co., Ltd., and Nippon Cookery Co., Ltd., both vendors that manufacture and sell products including

sandwiches] in order to comply with the Act on the Arrangement of Related Acts to Promote Work Style Reform,

rice balls, sushi, bento (boxed meals), and prepared foods to Lawson. The investment reflects an effort to provide

which will affect delivery drivers when it takes effect in April 2024, while reducing CO2 emissions and controlling

better products to customers by enabling us to become even more deeply involved in product manufacturing andcosts. Although we switched from three to two daily deliveries in an area that accounts for about 30% of ourdevelopment.

stores from 2005 to 2018 in an effort to streamline product manufacturing and shipping work, the new approach
will change the number of deliveries in the five largest metropolitan areas (Sapporo, Tokyo, Nagoya, Osaka, andFukuoka), which account for about 70% of all stores, with the result that all stores will receive two deliveries per

Nissui

Mitsubishi Corporation

70%

Lawson20%

10%

day. In addition, the measure is expected to reduce CO2 emissions associated with store deliveries by about 8%.
NC·GD Holdings
100%

100%

Nippon Cookery

Gourmet Delica

Establishing a refrigerated distribution model and expanding its coverage
We’re working to develop product supply structures that draw on new refrigeration and thawing technologies sothat we can offer a product mix that’s tailored to customer demand while reducing lost sales opportunities and losses
due to waste. A trial project has yielded a number of premium differentiated products made possible by refrigerated
distribution, including trout sushi.
Using AI to optimize store delivery routes
We’ve been using AI to optimize delivery routes since 2020 in an effort to reduce CO2 emissions. In OctoberStoresTypical approach(room-temperature products)

Vendor plant
Distribution center
Manufacture and shipment

Sales via product displays

Refrigerated distribution model(refrigerated products)

Manufacture and shipment

2021, we introduced store delivery routes created using AI for deliveries to stores served by our room-temperatureand frozen product distribution center in Gunma Prefecture (including about 400 locations), and simulations indicatethat those changes have lowered the number of delivery trucks by about 8% and CO2 emissions by about 7%. As of
July 2023, the area covered by the initiative has been expanded to the Tohoku, Kanto, Chubu, Kinki, Chugoku, andShikoku regions.

It’s difficult to accurately forecast customer demand when placing orders.
Customer demand > Order quantity: Lost sales opportunities
Customer demand < Order quantity: Losses from waste

Refrigerated distribution model

Customers

Enjoyment of products
Thawing

Sales via product displays
Freezing

Inventory can be managed at individual stores, after orders are placed.
Customer demand Timely thawing and sales via product displays->Fewer lost sales opportunities and losses due to waste

18

Sweeping Transformation Executive Committee

Transforming Profit Structures and Productivity

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Customer-centric Supply Chain Reform Project

Balancing supply chain optimization with measures to reduce food waste
Through a project centering on customer-centric supply chain reform, we are addressing food waste, one of
Lawson’s target social issues. We predict demand for each product based on 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’re also striving to maximize franchise store profit by improving daily sales and gross margin.

Features of the AICO next-generation ordering system

Week

Day

Day

Product mix recommendations

Upgrade!

Upgrade!

New!

Product mix
recommendations

Order quantity
recommendations

Discount
recommendations

Which products
to include

Which products
to purchasein which quantities

Which products
to discount,and how much

The system will generate weekly product mix recommendations
based on each store’s customers’ purchase history, geographic
location, and sales display characteristics. The system will makepossible a product mix that better reflects each store’s characteristics
compared to the current semi-automatic ordering system.

Rolling out AICO, our next-generation ordering system, nationwide
We’ve worked to boost the precision with which stores place orders by relying on a semi-automatic ordering system

Order quantity recommendations(a system that uses AI to automatically calculate the optimal product mix and order quantities for individual stores based

The system will provide more precise recommendations based on progress made in AI and computation technology

on their own data), which we introduced in 2015. We completed an advance verification of a next-generation ordering

since the introduction of the current semi-automatic ordering system. It will provide daily recommendations concerning

system that updated the older semi-automatic system for some stores in the Tohoku region*1 in 2021 and for somethe product order quantities that will maximize profit after forecasting sales based on a broader range of previous datastores in the Tohoku region and Tokyo* from June through September 2022. Since that process yielded the envisioned

gathered from “own store” and “other stores” (including weather, inventory status, sales results for individual products, andbenefits in terms of sales, gross margin, and waste volume in target categories* , we will begin deploying the approachinterconnectedness of sales across products).

to stores nationwide around March 2023 under the name AI Customized Order/AI Consultant (AICO). By augmenting the

Discount recommendations

2

3

product mix and daily order quantity recommendations of the previous semi-automatic system with recommendations for

The system will recommend discounts from the perspective of maximizing profit by utilizing the same sales forecasting

discounts on streamlined system, AICO will help further reduce lost sales opportunities and food losses (due to waste).

logic as order recommendations. Although discounted sales of products whose expiration date is approaching traditionallyhas depended to a significant degree on each store’s experience, the new system will make it possible to avoid unnecessary

Vision for the new ordering mechanism

discounts while more effectively selling through inventory by using AI to recommend discount amounts and timings based

The AICO next-generation ordering system is designed to implement our individual customer and individual storefocused philosophy by reassessing how each franchise store’s sales displays should be configured based on a focus
on individual customers and providing AI assistance for ordering to realize that vision. Our vision is to support franchise
stores through AI-generated recommendations while respecting local decisions and activities. This fundamental
approach is reflected in the inclusion of the words “Customized” (emphasizing our commitment to tailoring advice toindividual stores) and “Consultant” (evoking a relationship characterized by close partnership) in the system’s name.

on individual stores’ daily inventory. In addition, by eliminating the need for experience, AICO will help boost the frequency
of discounts, lower the workload on managers and veteran crew members, and streamline store operations.
Boosting logic precision and establishing an optimal store guidance model
To prepare for the rollout of the new system, we will spend fiscal 2023 making additional improvements, developing structuresthat will allow owners and crew members to use it with confidence and peace of mind, and preparing for the deployment. As an
example, relating to discount recommendations, we’re planning to introduce a mechanism that will make it possible to easily
print discount stickers after reviewing recommendations from headquarters as a way to reduce stores’ operational workload.

Help creating the kind of sales displays stores want
Realizing our individual customer and individual store-focused philosophy
through AI support for local decisions and activities
How muchinventory should
we keep on hand?

What products
are needed
functionally?

Customized
Tailoring advice to individual stores

Through this and similar initiatives, we’ll work to maximize franchise stores’ profits while reducing lost sales opportunities andfood losses (due to waste) by helping individual stores create the kind of sales displays they want from both digital (in the formof the next-generation ordering system) and analog (through store guidance from supervisors) perspectives.

Consultant

Checking the store computer

Working in partnership with individual stores*1 Approx. 60 stores*2 Approx. 180 stores*3 Target categories: Cooked rice products [bento (boxed meals), room-temperature sushi, rice balls, and chilled bento boxed meals],bread products, noodle products, prepared foods, desserts, bakery items, etc.

Discount
operations

Checking the store
computer atrecommendation time

Affixing discount stickers to products
Checking
recommendation
data and printing
discount stickers

Checking productnames on stickers andaffixing them totarget products

19

Sweeping Transformation Executive Committee

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Transforming Profit Structures and Productivity / Transforming Worker Motivation

Transforming profit structures and productivity

Unified Use of Group Data Project

Striving to expand our business using data and media

Transforming worker motivation

Group Branding Project

Cultivating a sense of unity at the Lawson Group

Our drive to realize unified use of Group data augments initiatives conceived to increase the sophistication of

The Group branding project represents a Group-wide effort to build a brand that resonates with customers.

our domestic convenience store business, for example market analysis and product development, with an effort toWhen the project was launched in 2020, we defined the Lawson Group’s core value as “a challenger that aspires

expand the range of data subjected to analysis (data owned by Lawson Group companies, external data, etc.) and toto be useful to everyone” based on consumer research, employee workshops, and other input. This value aligns

enhance services that make use of data, with the goal of tapping new sources of revenue.

closely with how Lawson Group employees are working to realize the Group philosophy of “Creating Happiness andPrincipal initiatives include working to establish data-driven analytical techniques and efficient promotional

Harmony in Our Communities” in everyday life as in times of emergency.

models by improving operations through enhancement of the types of data we can collect, visualization of current

In fiscal 2022, we opened an official Lawson Group account on the information-sharing website note.com,

conditions based on data, and resolution of outstanding issues. We’ve also started using techniques and models

communicated information on the Group’s information-sharing website, offered training, and held networking events

found to be effective to provide services to outside entities, rather than dedicating them to internal use only.

in order to foster shared awareness of the core value while boosting loyalty. We also launched a Group branding pageon the Lawson Group’s official website in May 2023.

Proposals with individually tailored content anddelivery methods using Lawson’s data and location information

Snacks(Internal)

Official Lawson Group note account (in Japanese)
https://note.com/lawsongroup_note/
Smartphones• Past purchase data
• Past coupon issuance andusage data (by media)• Attribute data (external)• Location information

The Group branding project will continue to build Lawson’s brand by communicating information inside andoutside the Group about how the Group is embracing challenges on behalf of society and the communities it serves
through the Lawson Group’s official website and its official note account.

Analyzing dataassociated with individuals
to offer proposals
that meet their needs

We will also continue to strive to realize the Group’s philosophy while pursuing initiatives to foster a sense ofunity, boost employee and crew motivation, and foster shared awareness in order to increase employee satisfaction.
Group philosophy Creating Happiness and Harmony in Our Communities• Web browsing history data
• Weather information, etc.

Desserts

Real stores

Lawson Bank

UNITED CINEMAS NATURAL LAWSON

LawsonLAWSON TICKETLAWSON STORE 100 HMV & BOOKSIn addition to enhancing customer satisfaction by providing information that meets individual customers’ needs,interests, and preferences in an appropriately timed and suitable manner, we’re looking to boost headquarters
earnings and secure new sources of revenue by utilizing the analytical techniques and promotional models we’vedeveloped.

20

Domestic Convenience Store BusinessBusiness Portfolio

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

LAWSONBusiness environment

Growth strategies

In fiscal 2022, there was an overall upward trend in the flow of people despite repeated waves of COVID-19.
Diversification in customers’ lifestyles during the pandemic has led to increasing demand for daily-use products

Using the following strategies, we are aiming for growth and development which is “community-based × individual
customer and individual store-focused.”in convenience stores. In response to these changing needs, we have been undertaking store remodeling, with thetotal number of stores successfully remodeled between fiscal 2021 and the end of fiscal 2022 standing at 7,290.

1. Nationwide expansion of an area company system

In addition to increasing fixtures for frozen foods and daily foods, other features added via this store remodeling

In fiscal 2023, we introduced an area company

include offering Machikado Chubo in-store kitchens* and the introduction of MUJI products* in the hopes ofsystem for our eight areas nationwide, transferring

attracting business for daily necessities through specific brand demand and as a result of browsing. We also

authority and functions from headquarters to area

undertook product innovation to make our frozen foods and daily foods more user-friendly. As a result of thesecompanies in order to strengthen our systemic,

efforts revolving around store remodeling, daily sales improved by 1.9% in fiscal 2022.

thorough pursuit of customer value creation at lo-

11

Also, we began the Happy Lawson Project*2 in June 2022

cal stores, which are closer to the customer. The

in order to let customers know about the store remodeling,

company presidents who are in charge of eachproduct innovations, and other sales floor and productcompany will oversee heightened strategy imple-

changes. Thanks to the success of the store remodeling andmentation.

Hokkaido
Company

Kitakanto
Company

TohokuCompany

Chugoku-Shikoku
Company
ShutokenCompany

KyushuCompany

the Happy Lawson Project and other marketing measures,

Chubu
Company
Kinki
Company

2. Product strategy, sales strategy and store opening strategy

despite the flow of people not being back to pre-pandemic
levels, and excluding rice, noodles and soft drinks, which

We will work to thoroughly ensure the deliciousness of our products.

were greatly impacted by the reduced flow of people, sales

For our staple products, we will endeavor to enhance product strength while optimizing product offerings for each area,such as by expanding availability of products which are locally produced for local consumption.

in all other categories for fiscal 2022 were higher than pre-For our sales floors, we will ensure the breadth of our product lineup and volume of our inventory while ascertaining the

pandemic fiscal 2019 sales.

differences in demand between regions and individual stores in order to reduce opportunity loss. Also, with the scheduled*1 Machikado Chubo in-store kitchens: 9,191 stores in total; MUJI products introduced: 9,621 stores in total (as of the end of February 2023)*2 A long-term marketing project to be implemented until 2025, which is the 50th anniversary of Lawson’s founding.
Will encompass a variety of initiatives, including a media strategy involving television commercials and other media promotion andproduct purchasing promotion efforts involving app coupons and other enticements.

Daily sales year-on-year

Segment profit
50

48.2

47.1
39.0
28.7

30

100

28.3

20

(Billion yen)

For store openings, we will look at area-specificstore openings with an emphasis on profitability.

99.5

101.1

100.1

For convenience store business that can be prof-

103.6

itable in areas with small commercial area pop-

92.7

ulations, we will continue to utilize a diversity ofstore-opening formats, such as opening stores in80

new locations, like those areas without any other

100able to customer needs, avoid products being out of stock and reduce waste loss.
demographic trends and, based on this, go about

120

40

phased introduction of the AICO next-generation ordering system from fiscal 2024, we will strive to be even more adapt-

2018

2019

2020

2021

2022

Fiscalyear

0(%)

store, opening stores in hospitals or in conjunction
2018

2019

2020

2021

2022

Fiscalyear

with bookstores, or mobile sales.
21

Business Portfolio

Domestic Convenience Store Business

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Multi-format store development

NATURAL LAWSONLAWSON STORE 100

NATURAL LAWSON, which operates 131 stores nationwide (as of the end of May, 2023) as a nearby store sup-In response to changing customer needs, we have revamped the store concept for LAWSON STORE 100 (659 stores

porting “beautiful, healthy and comfortable lifestyles,” is focused on “supporting health and beauty,” “seasonality”

throughout Japan as of the end of May, 2023) to being a “Menu-Support Convenience Store” well suited for daily use

and “safety and reliability.” To realize these ideas, it offers a unique and carefully selected lineup of environmentallythat meets the growing demand for eating at home. With these stores we actively work to enhance the product appeal

friendly detergents, cosmetics, and other daily products, as well as delicious and healthy food products, while alsoof private brands in order to strengthen seasonal meal ideas that support the daily dining table of our customers, andoffering great value.

we promote brand strategies to encourage purposeful purchases reminiscent of LAWSON STORE 100 and allow us toGrowth strategies
Promotion of physical and mental well-being

be a Menu-Support Convenience Store that fully capitalizes on the advantages of being small stores.

By offering customers the excitement of discovering products they
have never seen before and the happiness that comes from finding

Growth strategies
Becoming a “Menu-Support Convenience Store” that offers daily meal ideas
As a convenience store which is responsive to customers’ lifestyles, particularly with regard to fresh foods andyour own, personal favorite product, we support not only the physicaldaily food items, we are focused on developing and im-

but also mental health of customers.

proving our ability to support the daily lives of people(1)We will pursue a greater variety of health-related themes than ever before.

through the “seasonal ideas,” “customer communi-

We will make an active effort to offer products suited to the diversi-

cation,” and “safety and security” we provide on thefying dietary habits and health concerns of customers.

sales floor. While keeping abreast of macro consump-(2)We will build up our fresh-baked goods bakery.

tion trends, such as population aging and the increase

We will deliver a menu of items which are deliciously baked in thein single-person households, we will utilize customer

in-store ovens found only at NATURAL LAWSON.

segment data to help us accelerate individual store(3)We will carefully select an assortment of products from all over the world and Japan that have scarcity value.

management together with franchisees, and thereby
increase market share within commercial areas.

Healthcare-focused stores and stores selling over-the-counter pharmaceuticals

Hospital LAWSON (in-hospital) convenience stores

Through partnerships with dispensing pharmacies and drug store chains, as well as training registered sales personnel,

Lawson has responded to hospital patients’ needs for convenience stores by opening

we are expanding the number of stores that sell over-the-counter pharmaceuticals and prescription drugs. We also continue

Hospital LAWSON stores. We are now No. 1 in terms of number of convenience stores in

to open healthcare-focused stores offering a wider assortment of cosmetics and daily-use products than ordinary Lawson

hospitals. Besides our regular products and services, Hospital LAWSON stores feature

stores. At some stores equipped with drug-dispensing pharmacies, we are trialing online drug administration guidance,

a lineup of products designated by hospitals, and we also cooperate with individual

prescription pick-up, and other services. In addition, from February 2021, at some of our stores handling over-the-counter

institutions to develop customized stores and services, such as mobile sales wagons.

pharmaceuticals, we started the first deliveries of pharmaceutical products using Uber Eats in Japan. This service handles

Recognizing the hospital as a community in its own right, we seek the daily(as of the end of May, 2023) 63 types of Type-2 and Type-3 OTC drugs, including cold medicines, eye drops and stomach

happiness of all hospital patients by giving careful consideration to their detailed needs.

medicines. The service is tailored to the needs of customers who want to purchase medicine without having to go out.
22

Business Portfolio

Domestic Convenience Store Business

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Lawson health initiatives

Product development targeting deliciousness and health

Initiatives on healthful foods

products that enable the intake of essential nutrients, such as vegetables and protein, while controlling sugar andIn product development, we have established 10 health themes based on our own standards and are creating

The Lawson Group is developing a range of initiatives
in response to increasing health awareness among

Healthful product sales trends

customers. In 2001 we launched NATURAL LAWSON,
which has served as a laboratory for developing health-

400

380

conscious products that have been sold at Lawson

300

300

stores nationwide.
Sales of these healthful products represented roughly
20% of our total food products in fiscal 2015, growing
to around 26% of total food products in fiscal 2022, and200

salt content. Ever since the COVID-19 infections, customers’ awareness of health and food has changed, and there

500

500

is a growing demand to not only cut calories and sugar for dieting but also to actively consume protein and dietaryfiber to maintain health.

400

For fiscal 2023, our aim continues to be to offer tastier food under the theme of “stay healthy while eating what330

you like.” We are strengthening our product focus in areas where customer need is particularly high, namely protein,dietary fiber, sugar and fat, and we are also pursuing easy-to-understand display methods on the sales floor, suchas by displaying nutrient content on packaging through the use of color-coded markings.

200

100

we are working to provide a wide range of products thatencompasses everything from onigiri rice balls, healthy
and functional baked goods and salads to candy, chilled

LAWSON Farm0

2015
(Billion yen)

Performance

2017

Performance

2021

2022

Performance Performance

2023
Goal forIn order to ensure a stable supply of domestic farm produce to Lawson Group stores,

2025
Goal for

we have established LAWSON Farm, a corporation eligible to own farmland, at 16 locations

drinks, processed foods and more.

nationwide (as of May 2023). LAWSON Farm employs the Nakashima method of farming,

Lawson offers approximately 3,000 healthful products (including national brand products) in a wide range of

which involves conducting soil diagnoses to develop ideal soil for growing crops before

categories, from dietary staples and famous KARAAGE-KUN Fried Chicken* to confections and drinks. Our target forplanting, and which supplies appropriate nutrition according to the growing conditions tohealthful product sales is to reach 500 billion yen in 2025, which is roughly 40% of the total SKU count.

produce healthy, delicious vegetables and fruits.

*The protein content of KARAAGE-KUN Fried Chicken (5 pieces) is approximately 14g.

Reinforcement of 4 themes

History of initiatives for healthful food

Stay healthy while eating what you like

From 2015

From 2018

From 2020

From 2021

More protein

More fiber

Low carbs

Low fat

Low-carb

From 2012
Dietary fiber

Vegetables

Vegetables

Low-salt

Low-carb

Protein

From 2022
Dietary fiber

Tasty products
providing an easysource of protein

Products providing
an easy sourceof dietary fiber,
which people often lackUse of bran(grain husks) to control
carbohydrate intake

Products providing
oils which are goodfor the bodyBran bread

Onigiri rice ballswith sticky barley

Smoothie
series*1

Motto! Yasai(“more vegetables”)
seriesCurry thatbrings out theumami flavorof its ingredients

Expand todietary staples

GreaterproteinGreater
dietary fiber*1 Packaging was changed
in fiscal 2022.

23

Business Portfolio

Domestic Convenience Store BusinessSupporting franchise store management and reinforcing trust

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Management Owner (MO) system

Lawson’s closest, most strategic partners are the franchise store owners and store crews who serve customers on the

Lawson has established the Management Owner (MO) system to strongly support franchise store owners

forefront in communities throughout Japan. Strengthening the trust between franchise stores and Lawson while striving

operating multiple stores through a reinforced partnership with the Company. The MO has made a substantial

to develop stores that serve as essential“hubs of refreshment in every community” for customers and their local areas, iscontribution to the progress of the Lawson chain as a whole, not only by enhancing the brand image of the Lawson

crucial to realizing the Group’s Corporate Philosophy: “Creating Happiness and Harmony in Our Communities.”

chain through development of model stores and sales floors, but also by exchanging opinions or proposing improved

Lawson is using digital technology to reduce the need for staff and labor in store operations, while headquarters

work procedures to headquarters management personnel as representatives of the franchise stores in their region.

contributes by supporting franchise store recruitment activities and optimizing their benefit packages, as well

As of the end of February 2023, there were approximately 200 MOs operating stores in various regions of Japan.

as by strengthening various initiatives and systems to encourage sound store management through clear, open
communication.
Also, in order to improve franchise
store profitability, we offer various
means of support, including support
for day-to-day sales floor development

Abundant
product
lineupFranchise
storesheadquarters of disposal costs in ordering, active introduction of energy-saving equipment, and improvement andAs for franchise contracts, in matching new aspiring franchisees with franchise properties, we generally takecare to present them with existing properties which have visible status of current sales and profitability, so thatby supervisors, partial assumption by
to facilitate product lineup strengthen-Considerations when entering a franchise contract

Socialcontribution
activities

New
services
development

Joint business operations

LawsonHeadquarters

Environmental
activities

they can feel reassured in concluding franchise contracts and getting involved in store operations. Meanwhile, upon
confirming their intention to undertake management, we proceed with contract signing and opening of the newproperty. Furthermore, in fiscal 2020, we created a new 5-year contract package as an option for those who feelless confident about signing up for the existing 10-year franchise contract.

simplification of store operations.

Recommending and supporting multiple store operations
Lawson recommends that its franchise store owners operate more than one store. This enables them to spreadthe risk posed by the emergence of new competing stores so that they can maintain more stable management thanwhen operating a single store, while expanding their business easily. A key aspect of multiple store operations is thedevelopment of store managers who can be relied upon to manage store operations in place of the owner.

Safe management starting from storeswith visible performance results
Existing
storesExisting
storesChangein thedirect store
management
formatOlder
franchise
stores(stores with
expiring
contracts)

Pre-existing
management baseConfirmation of the candidate’s intention to undertake
management before completing a new property contract
OPEN!

Start of new
franchise store
management

Existing
Headquarters franchise stores
Confirmation of Headquarters
Selection of
New property
intention
new store
contract
property candidates to undertake
management

Opening

In fiscal 2020, Lawson started providing support for store manager training, in which Lawson trainers visit
individual stores to provide on-the-job training (OJT) to develop the skills of franchise store managers. Furthermore,in fiscal 2023, Lawson is launching digital technology-driven, content distribution-based, on-demand training andonline store manager training which can be participated in from anywhere in the country. As of the end of February
2023, the multiple store operation ratio stood at 77.9%*, while the multiple store ownership ratio was 47.4%*.
*Excluding LAWSON STORE 100

24

Business Portfolio

FeatureDomestic Convenience Store Business

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Management Owner

Making the convenience store
into a desirable profession
CEO Active Co., Ltd.

Naomi Ishizuka

Naomi Ishizuka currently operates 25 Lawson stores within Shizuoka.
When the Management Owner (MO) system launched in 2010, she was oneof the inaugural MOs. Despite overseeing approximately 450 employees,
she is very fastidious about her stores and continues to make in-store
visits to help with operations. What is the appeal of being an MO and ofworking for Lawson? We talked with Ishizuka to find out what she thinks.

I want to show how I work to my employees“The difference, I feel, after becoming an MO is that I have a larger
perspective from which to see the store network and Lawson itself. WhenI was an individual store owner, my perspective was limited to just my
store and its environs, but, after becoming an MO, I work together with
headquarters in coming up with strategy for my entire area,” says Ishizuka.
Before she was an MO, Ishizuka ran three stores, and, before that, she
was a beautician.
“I became an owner for the first time in 1994. Before becoming anowner, I was the manager of a beauty salon. I started running a Lawson
store in order to put to use some land that my mother owned, but, when I
put others in charge of running it, things didn’t go well. So, I quickly quit
the beauty salon and took over running the Lawson myself.”25

Business Portfolio

FeatureDomestic Convenience Store Business

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Management Owner

When Ishizuka quit, the salon owner told her to make sure to work
the hardest of everyone around her. If she didn’t, the owner said, people
wouldn’t follow her. “I took those words to heart and started at the store

Products found seemingly everywhere,
presented in displays seen nowhere else

for owners to provide their input and feedback.
“We must make customers happy by providing them with products foundseemingly everywhere but presented in displays seen nowhere else. This iswithout ever having worked a cash register. Even now, I still do the cash

Store management is carried out strictly by the book. “Ideally, I would

where a convenience store manager shows his or her skill. When ordering,

register, stock the shelves, place orders and all the other tasks. I say the

tailor the entirety of my sales floors and products to suit each store, but

you decide what you think will sell and how much it will sell, lock it in for thatsame thing to every new Lawson franchise store owner who comes to mythat’s a luxury I just don’t have yet. This means, then, that the first thing to do

week and then think about how to sell it, how to do the POP display, etc. This

store for training. My feeling has always been, and will always be, that I

is to arrange each store according to a recognizably set pattern. Every detail,is what makes this business interesting.

want to show how I work to my employees.”

like what numbered hole to affix the product shelf plate to, is meticulously

It was in 2008, when Ishizuka was running three stores, that she wasinvited by Lawson Headquarters to apply to be an MO.
“Because things weren’t going how I was hoping at the three stores, I
lacked confidence and declined the offer; however, during owner training,predetermined.”“With the changes made to the sales floor as a result of the Sweeping
Transformation Executive Committee’s measures, I am thinking hard about

She does things this way because of the bad experiences she’s had

how to leverage them for business to produce quantifiable results. President

with employees quitting one after another when the responsibility for suchTakemasu says that ‘it is the actual store that is everything,’ and that isdecisions was left up to others.

absolutely true. I want to create a good sales floor and do a job worthy ofthat blue Lawson sign.”

we were told by Lawson Headquarters that ‘labor shortages will become“Running a convenience store is hard. You cannot expect a young person

increasingly serious in an era of population decline. That is why we need toto suddenly be good at it when he or she has no experience. They get

In the summer of 2022, Ishizuka began trialing something new. “Ibuild an MO system that will serve as a strong management foundation.’scolded when there is a lot of waste loss because of poor ordering, or when

am moving to ‘cross-functional’ operations, where ordering, sales floor

I couldn’t sleep that night. I was thinking about how, once the crew

there isn’t a crew member to fill a hole in a shift. This sort of thing makes

development, human resources development, and other duties traditionallymembers who had supported us ever since our founding got older, they

them lose confidence and they quit. I finally realized this after talking withhandled by store managers are made the full-time responsibility of others

would need some place to work as well as in the store. So, I returned to theemployees who had quit. That is why, now, I have people start with a set

who are good at them. There is no precedent for this; I am completely feelingstores, talked with the crew leaders about the extra responsibilities thatmodel and build up success using it. And once they learn a model, they can

my way as I go. Everyone has strengths and weaknesses, so isn’t it better

would fall to them if I try the new role, and they said they understood it. So

break it. It was by having people learn the model before they start making

to have a system which lets people make the most of their talents andI became an MO and started opening multiple new stores.”their own adjustments that allowed them to grow.”

passions? If I can get all of the roughly 450 employees that I am responsible

When asked what was of central importance to running a convenience
store, Ishizuka answered, “How to generate profit as efficiently as possible
in a store with limited floor space; the key is to use the product sales share
as a barometer of customer needs.”

for to make the most of their different strengths, the result will be truly
powerful.”
So, what is Ishizuka aiming to achieve in the future? “Making theconvenience store into a desirable profession,” she replies.

In the past, the number of display shelves exceeded the sales share for“I want the owners and crew members to feel pride in their work. In thedaily-use products, before she found the actual share was just a few percent,past, the job of a beautician used to be considered undesirable as well, but,

according to her. “With the introduction by the Sweeping Transformation

with the emergence of charismatic beauticians, it has been transformed

Executive Committee of new refrigerators and other equipment, we had ainto a popular profession. Image is important. That is why I have always

foundation of equipment with which to pursue store development whichcared about crew members’ appearance. Of course, this is a business, so it

is matched to sales share. We monitor the daily sales share and look foris important to make money. I make good money and drive a nice car, andhow to increase daily sales by even just 1,000 or 2,000 yen. I believe thatthe money my business makes I want to use to provide a work environment

headquarters thinks the same and is helping by changing the composition

where employees feel motivated, which includes pay and benefits, andof the sales floor. The area company system has also been started, which I

where the recently growing number of crew members from overseas feel

think will further accelerate the speed of decision-making and make it easierthat they can achieve the Japanese Dream.”

26

Seijo Ishii BusinessBusiness Portfolio

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Seijo Ishii

Business model and strengths

Growth strategies[Business model]

Accelerate store openings and explore new store opening formats

Seijo Ishii utilizes its own unique business model of “vertical

With an eye toward future expansion of the store network and developing new mainstay products, the new, in-integration of food,” in which all of its processes, from importing,tegrated central kitchen, the Yamato No. 3 central kitchen, went into operation in July 2022, doubling the existing

logistics, and manufacturing to wholesaling, retail sales, andmanufacturing capacity (equivalent to 400 stores). The company will continue to open stores in the Kanto region,

restaurant operations, are carried out in-house. By performing thewhile also strengthening its expansion into western Japan. In addition, it is tackling the challenge of opening storesproduct planning, manufacturing, procurement and sales functions

with new formats, such as the Seijo Ishii BAKERY specialty store opened in Osaka City in April 2023.

itself, Seijo Ishii is able to dynamically adapt to customer needs andtrends and the raw materials procurement environment.

Store locations[Strengths]

208 stores•Good brand strength backed by high-quality products and services•Varied store formats adapted for train station buildings, street-level stores, and shopping centers(As of the end of February 2023)•Unique product category composition with a high proportion of products from the company’s central kitchen
and original products

Business environment
With the increase in shut-in demand caused by fewer people going out and more people working from home

ChugokuregionYamato No. 3 central kitchen

during the pandemic, sales of fresh food, groceries, and confectionery, centered on large street-level stores,

10
8

7.4

*Total for direct management stores, franchise stores and Le Bar à Vin52

Strengthen e-commerce business

Number of stores
11.2

11.1

Efforts continue to strengthen e-commerce and promote last-mile business initiatives which use delivery services

220

8.3

193

200

201

208

such as Uber Eats. In March 2022, we jointly developed and opened the Seijo Ishii net supermarket on Amazon.
co.jp; in January 2023, a store was opened in the ANA Mall; and in May 2023, a store was opened in the JAL Mall.

183

6

146stores

22storesand dishes prepared in the company’s central kitchens.

10.3

Kanto
regionChubu
regiondemand, sales continued to grow as a result of the strong performance in sales stemming from new store openings

Segment profit

2stores

37stores1storeincreased significantly for fiscal 2020 to 2021. In fiscal 2022, despite some degree of rebound from the shut-in

12

TohokuregionKansairegion180*Amazon and Amazon.co.jp are trademarks of Amazon.com, Inc. and its affiliates.

173

4
160

2
0
(Billion yen)

2018

2019

2020

2021

2022

Fiscalyear

0(Store)

2018

2019

2020

2021

2022

Fiscalyear*Total for direct management stores, franchise stores and Le Bar à Vin52

27

Entertainment-related BusinessBusiness Portfolio

Lawson Entertainment

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

UNITED CINEMAS

Business model and strengths

Growth strategies[Business model]

1.Develop services which seamlessly provide both entertainment and travel tickets

Lawson Entertainment: Develop Lawson Ticket and Lawson Travel, etc., ticket business and HMV store andFor ticket business, we will put in place a platform through which both entertainment and travel tickets can be

e-commerce, etc., merchandise sales business. Acquire content through a variety of business, plan Lawson store

purchased and will develop it into a ‘one-stop shop’ where a person can, for example, organize his or her concert

campaigns and other marketing, and develop, manufacture, and wholesale original products.

tickets, means of transportation (plane, train, etc.), and accommodation.

UNITED CINEMAS: Develop cinema complex business, and peripheral business, such as advertising sales

2.Pursue development of entertainment-related products for new domains responding to market changes

using theater media.

In merchandise sales business, we will further build up the planning and development strengths which the Lawson
Group has cultivated and will expand the products and services domains handled by stores and e-commerce to new[Strengths]

domains, such as cosmetics and sports-related domains.

•Top-class sales strength in terms of ticket agency share

3.Develop entertainment complex business•Able to leverage the Lawson Group's comprehensive strength to procure content•Planning and sales strength with regard to products and services which fuse “reality and the Internet” and “goods
consumption and experience consumption”

In cinema complex business, we will provide value-added services using theater facilities, such as acoustic
sensory premium seating, to increase theater attendance numbers. In addition, we will broaden the customer baseby screening content other than movies. Also, we will strengthen merchandise sales, marketing, sales promotion,•Highly competitive thanks to active efforts to provide added value, such as with a 4D movie screening systemand other business, using theaters as a touch point with media and customers.

Business environment

Content holder

Amidst an accelerating trend towards digitalization caused by changing consumer habits during the pandemic,
we took full advantage of the Lawson Group’s strength to expand our ticket business and cinema complex businessby utilizing both real stores and the Internet. As a result, Lawson Entertainment’s ticket business in fiscal 2022 wasContent procurement which leverages Group strengths
Products and services planning, development, and sales

higher than it was for fiscal 2019. In e-commerce business, we expanded our merchandise and saw significant
growth in sales compared with fiscal 2019. Also, in the UNITED CINEMAS cinema complex business, the transaction
amount per customer increased due to differentiated theater management offering 4DX® (experiential viewing),
IMAX®.
Segment profit
6
5

5.3
4.4

3.9

4

UNITED CINEMAS
Customer Attendance (YoY)

250

150

2.2

2

100

1

191.7
167.1

200
150

3

0

Lawson Entertainment
Ticket Sales (YoY)

111.2
100

113.4
109.5

50

50

-0.2

-1
Fiscal(Billion yen) 2018 2019 2020 2021 2022 year

0
(%)

35.4
Fiscal2018 2019 2020 2021 2022 year

0(%)

Domainexpansion

Domainexpansion
Ticket business

Merchandise sales
business

Cinema complex
business

124.0125.5

Adapt to diversification of customer touch points

107.4

Customers

51.2

Fiscal2018 2019 2020 2021 2022 year28

Business Portfolio

Financial Services Business

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Lawson Bank

Business model and strengths

Numbers of ATMs by region

Growth strategies[Business model]

Numbers of Lawson Bank ATMs installed

1.Strengthen ATM business

13,509•Develop ATM business which has as its foundation the
Lawson Bank ATMs installed in Lawson stores and otherWe will work to increase the number of ATM users by expanding our
Hokkaido

658(End of March 2023)

locations in all 47 prefectures, as well as develop deposit,

Chubu

credit card, etc., retail business.
•Utilize the ATM network to provide services which connect
ATM users with partner financial institutions and cashless
operating companies.

2,084

KyushuTohoku1,148

Chugoku

1,333

937

Kanto

4,150

Okinawa

257[Strengths]

Kinki•Network encompassing 385* partner financial institutions and others

Shikoku

installed in locations other than Lawson stores. We will also implement
measures aimed at expanding usage of existing services, such as
ATM-based payment application recharging, overseas remittance card
handling, and ATM-based sales deposit services. In addition, we will work
to add new and expanded functions and services that will keep peopleusing ATMs.
We are considering linking our ATM Stamp Cards, which we have

2,330

been implementing since September 2021, with Ponta Card, and, by

612•13,509* ATMs installed in all 47 prefectures in primarily Lawson

partner financial institutions, as well as expand the number of ATMs

using Group data and with the agreement of ATM users, we will develop

stores, which are used by more than 3.6 billion people annually

measures that can be used on an ongoing basis.

•Systems and structures in place which enable ATM access 24 hours a day, 365 days a year
•Offers Lawson Ponta Plus credit card service in partnership with Ponta Card, which has a membership base of over 100 million members*As of the end of March 2023

2.Develop new retail financial services
We will work to deliver new retail financial services tailored to customers’ daily lives and aimed at “providing needed

Business environment

services when they are needed” in order to make Lawson Bank the “bank closest to customers” and to build up these retail

Because of the strict restrictions on people’s activities during the pandemic, customer numbers for Lawson stores

financial services as the “second pillar of profitability” after ATM business.

declined, which resulted in a drop in ATM usage. However, in fiscal 2022, the rebound in the flow of people and thedemand for going out helped to increase customer numbers in Lawson stores, which in turn increased the average
number of ATM transactions per day per machine to 52.6, an increase of 5.1 compared to fiscal 2019 before thepandemic. Also, with the growing adoption of cashless payment, there is increased use of Lawson Bank ATMs tocharge up payment applications using cash.
Segment profit

Average number of ATMs used (per machine per day)
3.8

4

3.0

3

60

2.9

48.9

52.6
47.5

2.2
2

1.7

Strengthen
ATM business• Expand partner
financial institutions• Strengthen function
and reduce cost

Build andstrengthen
ATM-related
business• Strengthen
financial last-mile
functions

Until nowDevelop new retailfinancial services“LAWSON BANK supports everyone’s
happiness and challenge,
giving consideration to people’s life”• Offer financial
services which suit tocustomer’s life

FY2023–

48.4
43.1

Value for customers
Lawson Bank offer

40

Offer convenience
to customers

Support customer’s
challenge

Support customer’s
dream

Offer security
to customers

10(Billion yen)

2018

2019

2020

2021

2022

Fiscalyear

0(Number)

2018

2019

2020

2021

2022 Fiscal
year

29

Overseas BusinessBusiness Portfolio

Introduction

Value Creation

Business model and strengths

Growth strategies (China)[Business model]

1.Accelerate store openings

Strategy

Sustainability

Corporate Governance

Finance / Company Information

As a franchise chain of Japanese-style convenience stores, we provide

We will train management personnel and utilize our base of know-how accumulated to this point to expand store

franchised store support and products and services that incorporate

openings into other areas, with the aim of having 10,000 stores by fiscal 2025. In China, due to differences in culture

Japanese know-how, develop and sell original products tailored to eachand economic level in different regions, we will use subsidiaries operating in each cultural area as the starting points fromregion, and oversee the supply chain.

which to open stores, and we will use area licenses, M&A, and other means to expand our business.

[Strengths]

Lawson store exterior in China•Know-how that has been accumulating since 1996, when we opened

Area
China
Indonesia
Hawaii (U.S.)
ThailandPhilippines

our first Japanese-style convenience store in China•High brand strength, with 20 out of 24 areas where Lawson stores
have been opened in China recognizing it as the “No.1 CVS that people
want to use*”*Based on consumer survey for the second half of 2022

2.Enhance product strength and pursue DX

When first store opened
July 1996
July 2011
July 2012
March 2013
March 2015

We will pursue insourcing of PB products and development of products which promote health. Also, in addition to
working on the sustained acquisition of out-of-store income, such as delivery services for which sales are expanding, we
will pursue digital transformation (DX), such as the development of group chat and SNS live-stream-driven marketing.

Business environment
In China, from fiscal 2020 to 2021, despite sporadic restrictions on activities due to the pandemic, we came up withstronger delivery, live commerce, etc., services that provided sales growth. In fiscal 2022, the business environment was
severe throughout the year as a result of large-scale restrictions on activities across all of China, such as the total lockdownof Shanghai; however, the flow of people recovered, as did sales, as cities one by one passed their peak infection point,
and, in March 2023, sales at existing stores had surpassed those of the previous year.
In regions other than China, since fiscal 2020, we have suspended business at stores, shortened store hours, andtaken other measures in response to the impact of the pandemic; however, the flow of people, as well as sales, have been

Growth strategies (Asia Pacific)

recovering as restrictions on activities are eased and abolished.
Segment profit

Number of stores

1.Accelerate store openings

China
Asia-Pacific3

Our goal is to open 3,000 stores by fiscal 2025. In order to further accelerate store opening, we will collaborate with

8,000

2.3

2

6,116

6,000

0.8

1

0.0

0

4,000

-1

-1.0

-2

2,000

-3

2018

2019

2020

2021

2022

Accounting Period of Overseas Business: January to December

2,170

2,892

Fiscalyear

0(Store)

2018

276

2,629

2019

5,641

3,256

2020

major cities outside of Jakarta in Indonesia, and undertake other forms of business promotion.

295

3,532

263

197
1,973

-3.0

-4
(Billion yen)

475

4,761

local leading companies, as well as pursue full-scale franchise expansion in the Philippines, expand store openings to

4,466

2021

Number of stores as of the end of December

2.Enhance product strength
We will expand our range of competitive, high value-added original products, focusing primarily on counter fast foods
and chilled products. Also, while continuing to incorporate products which are popular in Japan and China, we will2022 Fiscal
year

strengthen development of products which are tailored to each region; e.g., to its food culture.
30

Message from the CFO

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Restore pre-pandemic profitability levels as soon as possible
My primary mission is to return the company to pre-pandemic profitability levels at the earliest possible date.

We aim to disclose information
to meets market needs so that
we can be properly evaluatedWe launched the Lawson Group Sweeping Transformation Executive Committee in September 2020 and customers
were able to experience the changed sales areas through attractively remodeled stores and new products. The
Happy Lawson Project (nickname: Happy-Law ! ) was launched with the aim of encouraging customers to visit
Lawson stores more often. In addition to the success of these initiatives in the past three years, the post-pandemic
recovery of customer traffic at stores helped us to exceed our projected operating income, ordinary income, andprofit attributable to owners of the parent in fiscal 2022. We believe that being able to respond to changes in the
post-pandemic business climate through effective measures and achieving these better-than-expected results infiscal 2022 has paved the way to achieving the performance indicators of the Lawson Group Challenge 2025

Member of the Board
Executive Managing Officer,
Chief Financial Officer

initiative.
However, we have not yet achieved the level of market recognition we are aiming for, and we feel that we need toproactively approach all stakeholders to accurately identify their needs and disclose information to them. Through a

Masayuki Itonaga

commitment to information disclosure, our goal is to improve the market’s recognition of Lawson, its growth strategy,
and its prospects.

Net sales of all convenience stores (Consolidated)

Profit attributable to owners of parent/
Profit per share

Operating income (Consolidated)

Total assets/Net assets (Consolidated)
Total assets

Profit attributable to owners of parent (left axis)

2,545.4billion yen

Profit per share (right axis)

55.0 billion yen

Profit attributable toowners of parent
Profit per share

2,600

2,442.7

2,424.5
2,400

30

80

2,545.4

2,506.9

60

60.7

24.6 billion yen
246 yen25.5 255

62.9
55.0

20

47.0

2,349.7

Total assets

24.6 246

20.1 200

1,366.1billion yen
287.0 billion yen

Net assets
300

1,500

1,342.3 1,357.7 1,365.4 1,337.2 1,366.1

1,200
200

17.9 178

900

40.8

40

Net assets

600

8.6 86

10

2,200

100

20

0
(Billion yen)

2018

2019

2020

2021

2022

Fiscalyear

0(Billion yen)

300

2018

2019

2020

2021

2022

Fiscalyear

0(Billion yen)

2018

2019

2020

2021

2022

0

Fiscalyear (yen)0(Billion yen)

281.9

2018

275.3

2019

272.9

2020

278.4

2021

287.0

2022

Fiscalyear

31Message from the CFO

Introduction

Challenge 2025 performance indicators for fiscal 2025
Achieve ROE of 15% or higher and EPS of 500 yen or higher

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Capital expenditures and cost control

We believe that we must achieve ROE of 15% or higher and EPS of 500 yen or higher, which are the indicators ofCapital expenditures were 88.0 billion yen in fiscal 2022 and are projected to increase to 117.0 billion yen in

Lawson Group Challenge 2025. To achieve this, it is important that we steadily implement the Action Plan for Lawson

fiscal 2023. While store investment in fiscal 2022 was mainly through remodeling of existing Lawson stores onGroup Challenge 2025, which we explained at the fiscal 2022 financial results briefing.

a non-consolidated basis, store investment in fiscal 2023 will mainly consist of opening new stores overseas. In

The core operating profit target for fiscal 2025 is 100 billion yen or more (IFRS), which will not be easy toaddition, Lawson will continue to remodel existing stores on a stand-alone basis. The company has been installingachieve considering the core operating profit was 64.3 billion in fiscal 2022. However, the domestic conveniencefrozen food fixtures to expand its lineup of daily use products, and renovations in target stores were completed

store business achieved 3.6% year-on-year sales growth in 2022 despite the pandemic preventing a recovery inin fiscal 2022. From fiscal 2023, we will remodel our stores in a more environmentally friendly manner. We will

customer traffic.

replace aging refrigeration systems with equipment that reduces CO2 emissions and install solar power generation

During the three years through fiscal 2022, we invested mainly in store remodeling and other projects throughequipment to reduce utility costs.

the Lawson Group Sweeping Transformation Executive Committee, as well as in spreading awareness of the Happy

Lawson plans to increase marketing expenses by 10 billion yen in fiscal 2023 compared with the previous fiscal

Lawson Project! (Happy-Law!), which was launched in June 2022. From fiscal 2023 onwards, we seek to increase

year. In addition to our Happy-Law ! media strategy, these expenses are aimed at reducing missed sales opportunities

the effectiveness of these investments. For fiscal 2023, we plan to achieve year-on-year sales increases of 6% in thethrough expanded product lineups and realizing synergy by being rooted in "community-based x individual customer

first half, 2% in the second half, and 4% for the full year. We believe that we can achieve our core operating profit

and individual store-focused operations." This will achieve the goals of the Lawson Group Challenge 2025.

target of 100 billion yen or more in fiscal 2025 by reaping the benefits of our investments and steadily executing ouraction plans with a full-fledged recovery of customer traffic.

Challenge 2025 performance indicators for fiscal 2025 ROECore operating profit

100 billion

EPS (left axis)

15% or higher

600

64.0

400

60

Approx.
40%

8.9%
1.8%

(Billion yen)

2022

2023

*1 Operating income (Japan GAAP): 55.0 billion yen

Payout ratio

9.3
7.3

289

200

150

6.6
200

99.7 150
3.2

5

2025

Fiscalyear( Yen)

2022

2023

2025

0
Fiscalyear (%)

0
(%)

2018

2019

2020

1.3

2021

150

150

Fiscalyear

0( Yen)

100

60.8

1.8

2022

150

83.9

74.6

100

2.3
1.5

0

172.7

255

5

200

150 yen
60.8%

300

8.9

0.6
0

Dividends

10

296*2

Seijo Ishii businessEntertainment-related business
Financial services business
Overseas business

20

10

Payout ratio (right axis)

Dividends (left axis)

ROA
15

Dividends/Payout ratio

ROA

ROE

500 yen or higher

12.4

80

40

ROE

ROE (right axis)

yen or more

Domestic convenience store
business

64.3*1Return on equity (ROE)/Return on assets (ROA)

15% or higher EPS 500 yen or higher

Basic earnings per share (EPS)/
Return on equity attributable to owners of parent (ROE)

Approx.
60%

100

We will significantly expand our product lineup and the volume of inventory so that we live up to customer
expectations all over Japan.

2018

2019

2020

2021

2022

Fiscal
year

50

0
(%)

*2 EPS (Japan GAAP): 246 yen

32

Message from the CFO

Choose capital policies conducive to growth

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

The value of dialogue with stakeholders

Growth and capital profitability are the criteria for judgment of our capital policies. We make concentrated growth

In early May, We went to Europe on our first overseas IR trip in three and a half years. We visited 10 companies ininvestments in our core domestic convenience store business and at the same time consider appropriate capital

three days and were able to see firsthand what investors want, and I believe that we were able to conduct extremely

policies that will be considered with a view toward industry reorganization and M&A. While always striving to balance

fruitful discussions. We will continue to actively seek opportunities to meet directly with investors in Europe, North

capital policy and shareholder returns, we aim to achieve the performance indicators of the Lawson Group Challenge

America, and Asia.

2025 by boosting the growth and corporate value of the Lawson Group as a whole.
Seijo Ishii’s application for listing was also part of our capital policy for the growth of our group companies. In lightof the market environment, we withdrew the application for listing in December 2022. However, we will continue tosupport that company’s growth while studying capital policies conducive to growth.

In the convenience stores business, everyone involved is a customer. This includes investors, business partners,
franchise stores, and myself. Therefore, my style is to talk to all stakeholders face-to-face as much as possible.
Lawson has voluntarily adopted International Financial Reporting Standards (IFRS) for its consolidated financial
statements for the fiscal year ended February 28, 2023, replacing the previously adopted Japanese GAAP. The main
reason for this is that we believe that disclosing financial information in accordance with IFRS—the global standard

Increase shareholder returns
We have decided to change our shareholder return policy from fiscal 2023. Our former policy, which began in
fiscal 2019, was to pay dividends with a target consolidated payout ratio of 50% in addition to the minimum annual

for accounting—will enable overseas investors, who account for about half of our shareholders (excluding stableshareholders), to make more accurate judgments.
IR Activities (Fiscal Year Ended February 28, 2023)

dividend of 150 yen per share. We will boost shareholder returns toward fiscal 2025. Specifically, the minimum

Financial results briefing, financial results conference callannual dividend per share has been set at 200 yen for fiscal 2023, 225 yen for fiscal 2024, and 250 yen for fiscal

Dialogue with investors

2025, and actual dividend paid each year will be either this amount or a consolidated payout ratio of 50%, whicheveris higher. In addition, we will consider additional returns, with a target total return ratio of 70% for the cumulative

IR seminar (investor briefing)

6 times
Approx. 200 times
2 timesperiod from fiscal 2023 to fiscal 2025.
The background for strengthening shareholder returns is the improved profitability of the headquarters andfranchise stores. We reduced the dividend in fiscal 2019 due to the need to strengthen support for franchise
stores suffering from higher labor costs caused by labor shortages. Since then, as a result of efforts to improve theprofits of our franchisees under our franchise store profit-focused management policy, despite the negative effectsof the pandemic in fiscal 2020, we were able in fiscal 2021 and 2022 to maintain franchisee profit per owner at
a higher level than it had been before the pandemic. The measures we have taken over the past several years,
including launching the Lawson Group Sweeping Transformation Executive Committee, have been successful andthe profitability of the headquarters and franchise stores has improved. This led us to decide that the time has cometo strengthen returns to shareholders and increase dividends.

33

Non-financial Highlights

Introduction

Packaging weight index ofplastic packaging items

CO2 emissions per store*1
Goals for fiscal 2030

50% from fiscal 2013

Reduction of（t-CO₂）（％）

Base year
101.8

120

Reduction of
(%)
100

40

2013

2022

Male childcare leave rate

2030 (Fiscal year*2)

2017

2022

2030 (Fiscal year*)

0

50

2018

2022

2030 (Fiscal year*)*Calculated from March to February of the following year to coincide with the company’s
fiscal year

*Calculated from March to February of the following year to coincide with the company’s
fiscal year

Number of female managers/
Proportion of female managers among
all managers

Number of working mothers/
Proportion of working mothers
among female employees

Outside (independent) officers

Number of working
mothers (left axis)

Proportion of female managers
among all managers (right axis)

165
Proportion of female managers
among all managers
13.0 %
180

90

120

127

131

9.5

10.1

10.7

148
11.7

165

273
Proportion of working mothers
among female employees
28.6%

(%)

(Persons)

20

300

13.0

200

0

2018 2019 2020 2021 2022 (Fiscal year)

0

93

5

10

0

95.7

117
89

16.1

92.0

104

100
75
50
25

25

0

2014 2015 2020 2021 2022 (Fiscal year)

Female officers

5

10

(%)

202
24.2

10
100

0

Proportion of working mothers amongfemale employees (right axis)

Number of working mothers

Number of female managers(Persons)

70.4
100

*1 CO2 emissions are calculated using the list of emissions coefficients by electricity
provider (substitute values)*2 Calculated from April 1 to March 31 of the following year to coincide with the administrative fiscal year Reduction of30.6%
in fiscal 2022 compared with fiscal 2013 (The figures have been changed due to the change in the coefficient.)

Number of female
managers (left axis)

(%)

93.6

150

25

0

104
92.0 %(Persons)

50

25

Male childcare leave rate(right axis)

Number of male employees
taking childcare leave

Base year
100.0

75

50

Finance / Company Information

Number of male employees
taking childcare leave (left axis)

50.0

50.9

0

Corporate Governance

Number of male employees taking childcare leave/
Male childcare leave rate

50% from fiscal 2018
76.9

70.0

75

70.7

80

30% from fiscal 2017
74.9

Sustainability

Goals for fiscal 2030
Food loss per store

Base year
100.0

100

Strategy

Status of reduction in food loss per store

Goals for fiscal 2030
Plastic for containers and packaging

CO2 emissions per store
Reduction of

Value Creation

219
24.4

211
22.2

240
25.9

273
28.6

40
30
20
10
0

2018 2019 2020 2021 2022 (Fiscal year)34Lawson Blue Challenge 2050 !

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Towards achieving Lawson Blue Challenge 2050 !
Lawson Group is pursuing efforts to achieve its social and environmental KPIs in the target years of 2025, the 50th anniversary of its founding, and 2030, the target year of the Sustainable Development Goals (SDGs). Lawson Group also
formulated its environmental vision, Lawson Blue Challenge 2050!, aiming to realize a carbon-free society by 2050 and ensure an abundant, blue planet for the future.
In order to contribute to the ideal world that the SDGs aim to realize, we will continue our initiatives to address environmental issues, such as reducing CO2 emissions, reducing food waste, and reducing plastic in containers and shoppingbags, as we take on difficult challenges to achieve our goals (the KPIs) for 2025, 2030, and 2050.

To achieve a carbon-free society by the year 2050, we will develop an environmental vision,
identify long-term goals, and strive to achieve these goals.

2025

2030

2050

50th anniversary

SDGs targets

Environmental vision

Lawson Blue Challenge 2050 !
—Save our blue planet ! —Reducing
CO2 emissions

Per store
2013 levels Reduce by

15%

Reduce by

50%

Reduce by100%

Food waste reduction

Per store
2018 levels Reduce by

25%

Reduce by

50%

Reduce by100%

Reduce by

30%

Plastic forcontainers andpackaging
Reducing plastic

Plastic forcontainers andpackaging Reduce by
2017 levels

15%

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

50% used

Plastic
shopping bags Reduce byContainers and packaging for
Lawson’s original products
Eco-friendly materials

100% used

100%
35

Environment

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Tackling issues like climate change to facilitate sustainable development
Strategy

Environmental Policy
To sustain the blessings of Earth for future generations, the Lawson Group considers the environment in every

Under the leadership of the Chief Compliance and Risk Management Officer (CRO), Lawson has formed a

aspect of our business activities and strives to achieve sustainable development and coexistence with local

Compliance & Risk Management Committee that cuts across multiple departments to identify risks and create risk

communities. We have made coexistence with local communities and striving to achieve sustainable development

scenarios each year. We evaluate each scenario on the basis of impact and likelihood and identify serious risks thatbasic principles of the Lawson Group Environmental Policy.

threaten to have a significant impact on our financial position, performance, cashflow, or strategy.

Lawson Group Environmental Policy
https://www.lawson.jp/en/csr/policy/environmental_policy/

With regard to climate change, we’ve evaluated the likely timing at which risks and opportunities related to thetransition to a decarbonized economy—for example through regulations on greenhouse gas (GHG) emissions—andto the need to adapt to physical changes such as intensification of extreme weather would impact our operations

TCFD proposal initiatives

as well as the magnitude of the impact on our financial position based on our analyses of the underlying scenarios.

Climate change is a serious environmental challenge with the potential to have a significant impact on thecontinuity of the Lawson Group’s operations. Lawson, the Group’s core company, endorsed the Task Force on
Climate-related Financial Disclosures (TCFD) in April 2020, and we continue to analyze the financial impacts ofclimate change on the Group’s businesses in line with the framework recommended by the TCFD.
TCFD proposal initiatives
https://www.lawson.jp/en/csr/tcfd/

Governance
The Lawson Group created the position of Chief
Sustainability Officer (CSO) to address intensifying
environmental problems such as climate change andappointed the president, CEO, and representative

Board of Directors

Audit & Supervisory Board

CSO (President and CEO)Management Committee

related to sustainability and which meets on a quarterly

In addition, we’ve set ambitious targets for reducing

Domestic convenience store business (Lawson, NATURAL LAWSON)

Scope of analysis

Lawson and franchise stores

Reporting period

2030, 2050

Analysis targets(1) Increase in store operating costs due to the introduction of carbon pricing(2) Impact on stores due to increased intensity of weather disasters(3) Increase in sales of environmentally friendly products

Lawson has formed a department to oversee the Group’s risk management to analyze and evaluate the likelihood
and potential impact of risks and to visualize the results as a companywide risk map based on those impacts (forSDGs Committee(Held on a quarterly basis)

Secretariat(SDGs Promotion Office)example, the scale of potential losses) and likelihoods.
We recognize climate-related risks as an extremely serious category of risk, and we analyze and evaluate
associated impacts on our businesses. We discuss how to respond based on the seriousness of each risk andbasis, as part of a program of “sustainable environment
preservation activities toward a carbon-free society.”

Target businesses

Risk management

director to fill it. We also formed the SDGs Committee,
whose membership consists of managers of departments

Scenario analysis overview

TCFD Working GroupCO2 emissions, food waste reduction, and reducing plastic, and the Board of Directors receives regular reports on
the status of these initiatives.
A working group has been established under the SDGs Committee to promote the disclosure of information related
to climate change. Members including staff from departments responsible for business strategy, accounting, andformulate measures including risk avoidance, reduction, and transference through use of insurance.
Metrics and targets
Furthermore, in an effort to contribute to the formation of a decarbonized society and the vision of the SDGs,
Lawson has taken on the challenge of even more ambitious targets (reducing CO2 emissions, food waste reduction,and reducing plastic) in its Environmental Vision, Lawson Blue Challenge 2050 ! “Save our blue planet ! ”
Please see page 35 for more information about the Environmental Vision.

investor relations are working to disclose information in line with the TCFD framework.
36

Environment

CO 2 Emissions Reduction

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

CO2 emissions reduction
Lawson has set itself the goal of reducing CO2 emissions per store
by 50% compared to 2013 levels by 2030. To achieve this target,
we are working to reduce electricity consumption in store facilities;

Goal for 2030 (KPI)

50

%

30.6

%

Reduction by
from 2013 levelfor example, by introducing energy-saving refrigeration systems andsolar power generation equipment and promoting the “Ten Energysaving Rules” in stores.

CO2 emissions generated by our supply chain during 2022

from 2013 level

Scope/category

Emissions covered

Scope 1 (Direct emissions)

Gasoline consumption of company vehicles

Scope3(Other indirect emissions)

4.3

Electricity consumption of the Headquarters, regional offices, branches, and stores

896.8

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

4,193.6

Category 2

Buildings, furniture and fixtures, and information system hardware

70.3

Category 3

Electricity consumption associated with procurement of electric power

145.0

Category 4

Energy consumption of distribution centers

136.0

Category 5

In-store waste and industrial waste due to store closures and remodeling

21.9

Category 6

Business trips by Lawson Headquarters’ employees

0.8Category 7

Commuting by Lawson Headquarters employees

1.4

Category 11 Use of products soldCategory 12 Disposal of containers, chopsticks, and plastic shopping bags
Total

Emissions(kt-CO2)

Category 1

Scope 2 (Indirect emissions)

Ten Energy-saving Rules
1. Clean refrigerator and air conditioner filters once a week.
2. Keep air conditioner temperature settings at 27˚C in summer, 18˚C in winter, and off in spring and autumn.
3. Minimize the time for which doors to walk-in and storage freezers and refrigerators are
opened while moving products in and out.
4. Keep the area around outdoor refrigeration and air-conditioning equipment neat and tidy.
5. Restock summer products that are frozen in-store from stocks that have been refrigerated.
6. Restock hot drinks with products that have been stored at room temperature.
7. Do not overfill storage freezers and refrigerators.
8. Turn off lighting and air conditioning in back rooms and storage areas when no one is present.
9. Arrange products in open cases so that they do not disturb the air curtain.
10. Minimize the number of times storage freezers and refrigerators are opened.

Approx. 5,567,100 tons

*Method of calculating greenhouse gas emissions in the supply chain
Calculated from the Database of Emissions per Base Unit Ver. 3.3 for calculating greenhouse gas emissions of organizations throughthe supply chain and Ver. 2.5 of the Guidelines for Calculating Greenhouse Gas Emissions.

Results for 2022

Reduction by

Total CO2 emissions

56.5
40.6
5,567.1*Does not cover all of Lawson’s supply chain. Total values cited may diverge slightly from totals calculated by adding individual values due
to rounding. Scope 2 includes electricity used by stores belonging to Category 14 of Scope 3.
Fiscal 2022 results have been subject to third-party verification by the Japan Management Association. (The third-party verification
process excluded electricity use by Scope 2 LAWSON STORE 100.)

Targets
SBT certification
To accelerate its efforts to combat climate change, Lawson submitted a commitment letter in June 2022 to the SBT Initiative*2, seeking certification*1 from that body to the effect that the Group’s greenhouse gas reduction targets are
consistent with the Paris Agreement.
Including group companies, we are working to identify GHG emission targets associated with our business activities, collect data, promote reduction activities, and set reduction targets as we strive to earn certification within two years aspart of a larger effort to achieve the 1.5°C target set forth in the Paris Agreement.
*1 SBT: Science Based Targets. These are greenhouse gas emission reduction targets set by companies that are consistent with the levels required by the Paris Agreement. Targets must be set five to 10 years ahead with the aim of reducing emissions by 4.2% or more per year.
*2 An international initiative jointly established by the World Wide Fund for Nature (WWF); the CDP, an international NGO working on environmental issues; the World Resources Institute (WRI); and the United Nations Global Compact (UNGC). The initiative works to establish reduction
targets that are consistent with scientific knowledge in order to prevent the average global rise in temperature caused by climate change from exceeding pre-Industrial Revolution levels by more than 2°C or 1.5°C.

37

Environment

CO 2 Emissions Reduction

Introduction

Conducting a pilot project with a new store to reduce electricity use

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Introduction of compact, fuel cell-powered trucks

In November 2022, we opened a new store in the city of Kawasaki, Kanagawa Prefecture, featuring solar panels

We began introducing compact, hydrogen-powered fuel cell trucks that were jointly developed by Toyota Motor

as well as glass and acrylic doors on about 80% of its refrigerated and frozen display cases as part of a pilot project

Corporation and Isuzu Motors Ltd. to help limit global warming and realize a sustainable society that can harness

whose goal is to reduce electricity use at the store by 40%, and CO2 emissions by 55%, compared to 2013 levels.

a more diverse range of energy types. Lawson distribution centers in the city of Motomiya, Fukushima Prefecture,

We’re planning to standardize this approach for new stores after March 2024 after verifying its effectiveness throughand Ota Ward, Tokyo, each began

February 2024. We’re also planning to bring the approach to existing stores when they’re due for renovations inoperating one of the trucks infiscal 2024 and beyond.

May 2023. Going forward, we will
work to reduce CO2 emissions
from distribution by progressively
expanding the area within which
products are delivered to storesby such trucks.

Lawson’s headquarters switches to green power
In April 2023, Lawson’s headquarters began filling its electricity needs with green power (effectively renewableenergy with environmental value such as post-FIT solar power). The change is expected to lower the facility’s annual
Introduction of CO2 refrigeration systems

CO2 emissions by about 280 tons. The office is also working to lower electricity use in July and August. In addition to

Lawson started installing highly energy-efficient non-CFC (CO2 refrigerant) freezing and refrigerating systems

emphasizing the need to turn off lights

in fiscal 2010. Approximately 5,300 stores have installed the systems (as of the end of February 2023). Thesein unused areas, the headquarters is

CO 2 freezer
Reach-in freezer
2 HP for freezing

Open display case

Display case withrear walk-in accesssystems use CO2 refrigerants whose impact

pursuing a range of initiatives with bothon global warming is considered to be lower

environmental and health components;

than that of CFCs, allowing them to materiallyfor example, encouraging workers to

reduce greenhouse gas emissions. They also

use air conditioning appropriately anduse considerably less energy.

to adopt business-casual attire.

CO 2 freezer
10 HP for freezing

38

Environment

Reducing Plastic Use

Introduction

Reducing plastic use
The material plastic brings convenience to our lives but also poses

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Food waste reduction
Goal for 2030 (KPI)30

Lawson considers reducing food losses due to waste to be anenvironmental problems due to plastic waste. Lawson is working toReduction byaddress those problems by reducing use of shopping bags, plastic

from 2017 level
Plastic in containers and packaging%

beverage bottles, and other plastic containers.

extremely important priority, and we’re working to realize a 50%
reduction compared to 2018 levels by 2030 through a combination of

Goal for 2030 (KPI)

50

%

23.1

%

Reduction by
from 2018 levelmeasures including optimizing orders, discounting prices to encourage
Results for 2022

Reduction by
from 2017 level25.1

sales, and modifying containers to extend best-by dates.

%

Lawson launches pilot project to use paper lids for coffee products at MACHI café

Results for 2022

Reduction by
from 2018 level

Promotes buying the frontmost item on the shelf

In June 2023, Lawson launched a pilot project to switch from plastic to paper lids for MACHI café hot coffee

We’re working with the Consumer Affairs Agency; the Ministry of Agriculture, Forestry and Fisheries; the Ministry

products (S size) at some stores. The change reduces the amount of plastic per cup from 2.1 grams to 0.3 grams.

of the Environment; and the Japan Franchise Association to implement the “Choose from the Front” program. The

Once the pilot project is complete, we plan to roll out the change to all stores with MACHI café offerings nationwide

program seeks to reduce food losses by encouraging customers who plan to consume a purchase immediately to(as of July 31, 2023, about 13,700 stores).

choose the frontmost item on the shelf.

Replacing the lids of salad containers with plastic seals

Flash-freezing and donating KARAAGE-KUN Fried Chicken

In May 2023, we began using plastic seals instead of lids for some salad

and other products whose sell-by date* has passed

containers at Lawson stores nationwide (excluding Okinawa prefecture). The

We’re conducting a pilot project at some stores in Tokyo to reduce food wastechange is expected to lower annual plastic use by about 100 tons and annual

while ensuring that food is used effectively by flash-freezing KARAAGE-KUN Fried

CO2 emissions by about 160 tons.

Chicken and other fried foods that have passed their sell-by date and donating themIn the past, we had used latching plastic lids for salad containers, along withto cafeterias for needy children and other organizations.

additional strips of tape to keep the lids from coming off. Switching to plastic

The project, which is part of a joint initiative with Shinagawa Ward and theseals helps reduce plastic use in the lid and tape as well as CO2 emissions.

Shinagawa Ward Council on Social Welfare conceived to help feed needy children,

Moreover, we’re using technology for printing directly on the packaging material

involves freezing fried foods that have passed their sell-by date with a flash-freezer

to save resources by eliminating the need to affix paper product and ingredientthat can preserve the items while retaining freshness and donating them to cafeteriaslabels as in the past.

for children and other organizations in Shinagawa Ward via the Shinagawa Children’s
Cafeteria Network. Donated food is recooked by the cafeterias and used as partof their lunch and dinner menus. We’re studying regional needs and operational
processes through the pilot project and examining whether we can bring the program
to other stores and expand the range of products it includes.
*Lawson determines sell-by dates using a proprietary method. Items are removed from stores but canbe consumed since their expiration date has not passed.

39

Society

Human Capital

Basic policy of human resources strategy
At Lawson, we have a well-systematized Group philosophy, as well as accompanying action guidelines in the

Introduction

based on each individual’s capabilities, without regard to his or her attributesand values. Together with this, we also conduct regular training, as well as job-

nationality, age, educational background, origin, or other such factor.

specific training, rank-specific training, selective training and more, in order to

For Lawson, the ideal human resources are those who can express value through cooperation and teamwork,

support individuals in achieving their career aspirations. Moreover, starting in

who are capable of continual change in order to generate value, and who persevere in order to achieve goals. The

January 2023, we introduced a “lawson management school” which included

behavior of such personnel is characterized by being capable of thinking and acting on their own initiative.

153 branch managers and sales department managers nationwide and which

To put our Group philosophy into practice toward achieving the fiscal year mission, we have a growth-

was taught by the president. Our aim is to promote awareness and leadership
Division Directorof Human Resources

Takeji Hino

We evaluate employee behaviors (processes) that produce positive results and employee performance (the results

individual employees are also asked to specify their goals for the future in light of their personal histories and current
positions. Interviews are conducted to support their growth as individuals.

among managers on an individual level, such as with regard to the qualifications
as a leader, the importance of earning power, organizational skills and the pursuitof ideals, to, thereby, contribute to the further growth of the Lawson Group. In the
future, we plan to expand this program to product, marketing and developmentof the behaviors), relying on these two evaluations to determine how employees should be treated and to further
We employ a career development sheet to ensure employees’ ability to determine their own career paths, andFinance / Company Information

At Lawson, we operate a personnel system which determines role grade andOur personnel hiring is conducted in line with the Lawson Group Human Rights Policy and focuses on eachhuman resources development.

Corporate Governancesalary according to scope of responsibility and role to be fulfilled, and which isindividual’s aptitude, motivation and ability regardless of gender, gender identity or expression, sexual orientation,

roles to be fulfilled for each job, as well as by introducing a system for evaluating the behavior of each employee.

Sustainability

Cultivating new human resources using a developmental personnel system

responsible for putting it into practice.

foster a culture of self-initiative by operating a personnel system which clarifies the scope of responsibility andStrategy

Message from the Division Director of Human Resources

form of the Lawson’s Way (Action Guideline), and we invest effort into cultivating core human resources who will becentered HR system that encourages employees to think and act autonomously in performing their jobs. We

Value Creation

managers as well. Since fiscal 2016, to help general managers become theSustainable Corporate Growthnext generation of senior management leaders, wehave pursued committee-driven creation of individualGroup philosophy

Fiscal year mission

development planning, personnel development throughinterviews and other means, and progress monitoring.
And in order to also foster the development of female

Lawson’s Way (Action Guideline)
1. Create 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.

Personnel capable of thinking andacting on their own initiative[Individuals][Superiors]

Capable of thinking andacting on their own initiative

Training
subordinates

leaders, we have decided that one out of every threecandidates must be a woman.
Also, in order to improve employee engagement, we
conduct an employee awareness survey once a year
and share the results with not only management but all
employees company-wide. Also, we promote diversity, equity
and inclusion (DE&I) as a part of our management strategy.

Developmental personnel system

Within this, our greatest effort goes towards promotion of
female advancement in the workplace. Furthermore, we
seek to cultivate a better working environment and provide

Lawson’s Way Action Guidelines

support for healthy lifestyles in order to help our employees
maintain and improve their health.
40

Society

Human Capital

Introduction

A training program which supports career development

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

List of main training content

At Lawson, with the aim of putting our Group philosophy into practice, we operate a training program which isbased on Lawson’s corporate and business strategies and which delivers high-level knowledge and skills neededfor various job types and positions. In order to facilitate autonomous growth among our employees and empower
them to be “capable of thinking and acting on their own initiative,” a training system is independently provided by

Training

TargetFrequency

ParticipantsCompany entry training program
Employee training for new routine hires

New routine hires

Once per year

89

Employee training for new non-routine hires

New non-routine hires

10 times/year

64

Store employee training

the Company, as well as an environment for employees to pursue independent learning. And with a view also to

Employee training for routine hires (university graduates)

New routine hires (university graduates)

4 times/year85

reskilling, all personnel are provided with systematic and ongoing support, such as a more robust e-learning system,

Employee training for routine hires (high school graduates)

New routine hires (high school graduates)

4 times/year

10

regularly held self-directed training, and an expanded LOCP (a personal development support system), to help themTraining for non-routine hires

New non-routine hires

2 times/year

5

Store manager training

Store managers

4 times/year

178

Store manager follow-up training

Store managers

2 times/year24

ASV promotion training

Assistant supervisors

2 times/year

145

SV pre-promotion training

Assistant supervisors

6 times/year

156

SV training

Supervisors

8 times/year279

MC promotion training

Managemental consultants

2 times/year

16

AMD training

Assistant merchandisers

2 times/year

51

ARFC training

Assistant recruit field counselors

4 times/year18

Job-specific training

pursue learning at any time they want.
Aim of the education and training system
From new hires to management, we categorize and provide the knowledge and job requirements necessary foreach role. Learning content is separated into different categories, including technical skills required for general jobs
(e.g., basic and job type-specific specialized knowledge and skills), interpersonal skills necessary for management
and leadership, conceptual skills used to develop the managerial perspective of executive candidates, and employee
awareness-raising educational matters which apply company-wide, such as compliance and human rights, DE&I andlabor management. We also provide this education and training in the format which is best suited to the participant,such as face-to-face training, online training and e-learning.
Technical skills

Interpersonal skills

Conceptual skills

Basic knowledge
for general jobs

Specialized knowledge
for general jobs

Basic knowledge
for managerial jobs

Management knowledge
for managerial jobs

Senior management andexecutive awareness-raising

Company entry training program
Store employee training

Job-specific training(line-specific training)

Rank-specific training(target/entry)

Selective training

Selective training

Common to
all employees Separate training in compliance and risk management, human rights, DE&I, harassment, SDGs, labor management, and career design

Learning venue (training frequency) expansion
Due in part to recent changes in the social environment (e.g., changes implemented to prevent infectious spread),
we utilize not only face-to-face training but all means to provide a learning venue to participants. In particular, ourRank-specific training
New junior manager training

Assistant managers

2 times/year84

New manager training

Managers

2 times/year39

New senior manager training

General managers

2 times/year

13

M1 upskilling training

Assistant managers

2 times/year172

M2 upskilling training

Managers

2 times/year

162

Selective training
Lawson management school

Branch managers, sales department managers

1 time/year

153

Lawson management course

General managers, managers

1 time/year

18

Executive management course

General managers

1 time/year

11

Transformational leader development program General managers

1 time/year

1

Common to all employees

early changeover to, and active introduction of, online training has had an extremely pronounced impact, and we

Human rights and diversity training

All employees

1 time/year

All employees

have been able to increase the types and frequency of training to match employee needs.

SDGs training

All employees

1 time/year

All employees

Compliance and risk management training

All employees

1 time/year

All employees

Labor management training

All employees

1 time/year

All employees

Manager-focused labor management training

Managers

1 time/year

All managers

Remote work training

Required for remote work applicants

1 time/year

All targets

Career design training

Employees who will turn 53

6 time/year

131

Fiscal 2020

Fiscal 2022

60

119

198.3%

Training participants*

1,887

3,082

163.3%

E-learning courses*

44

160

363.6%

Item
Training sessions**Human Resources Department-led training system in Lawson Inc.

Extension rate

*Fiscal 2022 figures for Lawson Inc.

41

Society

Human Capital

Introduction

Engagement score ascertainment

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Work motivation reform project
In order to improve employee job satisfaction and engagement by fostering personal development and a sense of

An employee awareness survey is given to all employees once a year in order to bring company-wide issues

achievement through the voluntary pursuit of challenges undertaken within a context of mutual trust and solidarity

into focus and contribute to improved organizational management. Questions are divided among the categories ofamong the diverse human resources working together in the Group, we have launched the “Work motivation reform”

company, job, workplace, superiors, systems and career autonomy, with responses being compared year-to-year

project under the guidance of the Sweeping Transformation Executive Committee.

to analyze changes from the previous survey and their causes, correlations between questions, and other factors.

For this project, we recruit volunteer members from among employees nationwide to discuss specific proposals

Satisfaction levels on the fiscal 2022 employee awareness survey were higher in almost all categories comparedon a range of topics, such as stimulating more active communication and streamlining business operations. In fiscal

with the previous year.

2022, thirty members were divided into three teams to discuss “business operations improvement,” “interpersonalconnection” and “feedback” and come up with measures to propose to the president and other executives that will

Question: I am satisfied working for this company.

Positive response rate

contribute to increased job satisfaction.

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

70.4%

70.8%

74.7%

74.0%

74.5%

*Employee awareness survey results (figures for Lawson Inc.)

Expansion of challenge opportunities: the 100 Million Yen Challenge
and the Lawson Challenge Award
The 100 Million Yen Challenge was developed to solicit ideas for new challenges that would be undertaken
within a budget of 100 million yen. It has been in operation since fiscal 2021 as part of the Work motivation reformproject. During that first fiscal year we received 170 entries, and the number grew to 200 in fiscal 2022. After all ofEngagement enhancement efforts
Employee awareness survey improvement activities
The results of the employee awareness survey are reported at the management meeting and are used in considering
different measures and systems for addressing company-wide issues. In addition, the results are used to createorganization-specific charts, and, for feedback, each employee is provided with a summary of the survey results
for all employees as well as the chart for the organization to which he or she belongs. Within each organization, thehead of the organization talks with members about improvement activities to address the organization’s issues andcollectively improve the workplace environment.

the presentations were made to the president and executive officers, it was a plan for a coffee subscription service
which was ultimately chosen and which is now being trialed in Aichi Prefecture.
In fiscal 2018, the “Lawson Challenge Award (L-Challenge)” was begun to solicit and publicly recognize job
innovations and business operation improvements and new ideas implemented over the course of the year. In fiscal
2022, there were 149 entries, of which the top ten made presentations to the president and executive officers, withthe final award going to the Chubu Product Department for its development of a Yokkaichi Tonteki-don rice and meatbowl (sale ended), which is a popular local dish.
Through these sorts of measures, employees are encouraged to voluntarily seek out challenges.

In fiscal 2022, in addition to the annual employee awareness survey, a simple pulse survey was trialed insome areas. This survey is conducted once every two months in order to get real-time results that are used in an
organizational improvement activity cycle, such as faster situational assessment and action. This simple pulse survey
will be introduced to all branches nationwide in fiscal 2023 with the aim of more quickly ascertaining employee
engagement on-site and then pursuing improvement measures.

Coffee subscription
service selected forthe fiscal 2022 100
Million Yen Challenge

The Chubu Product Department’s local specialty productselected for the L-Challenge (Lawson Challenge) Award in
fiscal 2022.

42

Society

Diversity

Introduction

Promotion of diversity, equity and inclusion (DE&I)

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Diversity, equity and inclusion (DE&I) promotion efforts

Within Lawson, we have made diversity, equity and inclusion (DE&I) a key part of our management strategy.

In order to promote DE&I, since 2005 we have conducted our routine hiring with the aim of achieving a 50-50 balance between

Lawson aims to be a company which promotes employee diversity, treats all employee fairly, is accepting ofdifferences, and empowers every employee to voice his or her ideas and to tackle challenges.

men and women. Since 2008, we have been actively hiring non-Japanese recent college graduates, with around 10-15% of newhires each year being non-Japanese. After hiring, follow-up training is provided, and employees are assigned not only overseas but
to a variety of different departments. Currently, the majority are working in management positions.
In order to promote employment of people with disabilities, we established the Lawson Will special subsidiary in 2013 andD (Diversity)

E (Equity)

I (Inclusion)consign a portion of Group company business operations to it. Furthermore, employees with disabilities are now included within the

We warmly welcome diversity among our team members,
not only with regard to gender,race and age but also individual
character, customs, religion andother attributes.

We prepare the necessary
resources according to each
person’s background so thateveryone feels empowered tovoice their ideas and supported
in taking on challenges.

We work to create an environment of unity, where everyone has respect for one anotheras colleagues and individuals
and where there is acceptanceof one another’s value system.

scope of our system which allows employees to select the number of days and hours they work, and we are also now promoting
their hiring as regular employees. We are endeavoring through various initiatives to create an environment of greater understanding
for the disabled, such as by trialing the wearing of bibs which display an employee’s job duties, thereby helping to relieve theanxiety of store employees with disabilities who feel it difficult to perform customer service tasks, as well as giving those interested
the opportunity to participate in wheelchair basketball experience events.
In fiscal 2021, we raised the retirement age to 65 and introduced an Active Senior Full-time Employee System. Accompanying
the extension of the retirement age, we provide all employees who have reached the age of 53 with career design training in orderto provide them with a venue for thinking about future career development. Also, we create an environment conducive to continued

Diversity, equity and inclusion (DE&I) promotion system

work after the age of 60 by offering these multiple job courses and work styles to choose from.

With the president at the top and working in conjunction with the Human Resources Division, a DE&I promotion
officer is appointed who oversees necessary system planning, operation, assignment, etc. Also, the Marketing
Strategy Division carries out marketing based on ideas provided by women in order to create new business value.
In addition, leaders are chosen for each area of the country, with regular sessions of the “Genki Leader Committee”
being held to with the aim of promoting DE&I, stimulating in-house communication, and promoting employee health.

Starting in fiscal 2023, we are working to promote greater LGBTQ understanding among employees by (1) conducting seminars
and e-learning, (2) establishing a consultation desk, (3) changing our company housing system (to allow same-sex partners), and(4) changing internally used common names (to allow changing to a name which conforms to one’s gender identity).
Additionally, in order to help non-Japanese part-time in-store employees more quickly learn store operations, a multilingual
partial translation of the operations manual and a multilingual (nine languages) lexicon of Lawson-related terminology – a“Lawsonary” –have been introduced, along with other support, like the use of easier-to-understand Japanese.
We disregard gender, gender identity and expression, sexual orientation, nationality, age, schooling, and birthplace, focusing
instead on individual suitability, motivation, and ability.

DE&I Promotion System

Monthly average overtime hours/Annual leave utilization rate*

President

Item

Marketing Strategy Division

Human Resources Division
DE&I Promotion Officer

Marketing Team

DE&I TeamGenki Leader Committee

Monthly average
overtime hours

Annual leave utilization rate

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal
2022

11.2

10.7

9.4

10.5

10.9

40.9% 53.4% 54.2% 57.2% 60.4%

Employment of non-Japanese employees (as of the end of fiscal 2022)*
Country/territory of origin
China
Korea
Vietnam
Nepal
Mongolia
Indonesia
ThailandBangladesh
Total

Males
47
13
1
2
2
1
—
1
67

Females
54
21
2
—
—
—
1
—
78

Total
101
34
3
2
2
1
1
1
145

*Figures for Lawson Inc.

43

Society

Diversity

Introduction

Value Creation

Strategy

Sustainability

Corporate GovernanceOur declaration!

Goals and efforts for the promotion of female
advancement in the workplace

Lawson will promote female advancementin the workplace as part of DE&I promotion.

as they raise children” and have made it a quantitative goal that “30% of all employees shall be

Finance / Company Information

We have made it a qualitative goal to “be a company which enables women to continue working
women by fiscal 2030” and “30% of all managers shall be women by fiscal 2030.” Since 2005, weDiversity of human resources is indispensable to innovation.
At Lawson, we believe that the active recruitment of diverse employees, including women and non-Japanese,
combined with an empowering environment which helps them to develop, contributes to increased corporate
value; thus, we will continue to actively pursue the promotion of female advancement in the workplace.
President and CEO, Representative Director, Chairman of the Board

Sadanobu Takemasu

have made it a goal that “50% of newly hired college graduates shall be women,” and we continue
to actively recruit women in order to ensure we meet this. Also, for female employees in their mid-twenties to early thirties, we want
help alleviate their concerns about being able to balance life events and work so that they can continue working; thus, we provide careerdevelopment training where women can talk with their seniors about the latter’s experiences, as well as chart their own future career
path. Furthermore, we run selective leadership training as supplementary training for sales line manager candidates, during which
opportunities to meet and talk directly with female corporate executives and the president are provided with the aim of fostering aleadership mindset. In addition, we conduct childcare leave employee training aimed at providing company information to employees onchildcare leave and facilitating career development for after they return to work, as well as cultivating a network. This training alleviates
employees concerns about returning to work and helps them get back up to speed.

Data relating to women*
Gender wage gap

Fiscal 2022

All workers

62.5%

Subset of regular employees

80.8%

Subset of non-regular employees

88.1%*Explanation about data calculation•Target period: Fiscal 2022 (March 1, 2022 February 28, 2023)•Regular employees: Regular employees other than executive officers.
•Non-regular employees: Temporary employees, part-time employees.
For part-time employees, the average annual wage is calculated based on the cumulative
number of employees for legal working hours (eight hours/day).

Because men’s participation in childcare is important for achieving female advancement in the workplace, we introduced our own,
distinctive short-term childcare leave system in 2014. Since fiscal 2018, the utilization rate has remained at or above 90%. Also, with
the introduction of childbirth childcare leave (post-birth leave for fathers), we provide e-learning about it to all employees and encouragethem to make use of it. As a result, the combined utilization rate for long- and short-term childcare leave amongst men in fiscal 2022

*Supplementary explanation about gap•With regard to regular employees, because the number of continuous years worked is fewer for women than men (difference of 6.9 years) and the percentage of female
managers is low (13%), this has a major impact on the wage gap. Thus, we have made promotion of female advancement in the workplace a key management priority,
aiming to raise both the percentage of female employees and managers to at least 30% by 2030, and, towards this end, we are engaged in a variety of human resources
development, such as employee-focused career training.
•With regard to non-regular employees, the wage gap between men and women is due to the fact that many men are rehired as temporary employees after theirretirement, thus receiving higher wages, while many part-time employees are women.
•The wage gap between men and women for employees overall is due to the fact that men make up a higher percentage (80%) of regular employees, who receive
relatively higher pay, while women make up a higher percentage (62%) of non-regular employees, who receive relatively lower pay.

was 92%, with 22.3 days being the average amount of leave.

Male childcare leave rate*

Proportion of female managers among all managers*
Fiscal 2014

Number of male employees taking childcare leave
Male childcare leave rate

Fiscal 2015

Fiscal 2020

Fiscal 2021

93

117

89

104

16.1%

70.4%

93.6%

95.7%

92.0%

Fiscal 2020

Fiscal 2021

Fiscal 2022

Proportion of working mothers among female employees*
Number of working mothers
Percentage of working mothers among female employees*Figures for Lawson Inc.

Fiscal 2019

employees who can serve as roles models, and much more.
Lawson has developed a number of support systems adaptable to employee needs to help them balance childrearing with work,
including a reduced working hours/days system, holiday system and family accompaniment transfer system.

Fiscal 2022

23

Fiscal 2018

In addition, a Lawson Work Style Handbook has been created and shared with all employees which contains a message to them fromtop management about DE&I promotion, as well as an introduction to the career path and work-life balance support systems, profiles of

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

No. of female managers

120

127

131

148

165

Proportion of female managers among all managers

9.5%

10.1%

10.7%

11.7%

13.0%

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Proportion of female new graduate hires*Fiscal 2018

202

219

211

240

273

Number of female new graduate hires*

78

100

99

58

46

24.2%

24.4%

22.2%

25.9%

28.6%

Proportion of female new graduate hires

41.7%

44.4%

44.8%

49.2%

51.7%

44

Society

Working Environment / Health and Productivity Management

Working environment

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Health and productivity management

With the aim of ensuring employees have a safe, worker-friendly and motivating workplace environment, we provide

As a company that contributes to customers’ overall health, Lawson values the health of its employees as well as the owners

opportunities for dialog-focused labor-management consultation and encourage employee participation in discussions

and crews of franchise stores. We announced a health declaration to this end in 2013. With the president serving as Chiefon a variety of topics, including how to develop the workplace environment and promote work efficiency and improve theSustainability Officer (CSO) and Chairman of the Health and Wellness Promotion Committee, we have established a system toorganizational culture. In particular, both labor and management conduct monthly self-checks and engage in dialog about

actively promote health and productivity management and strengthen health initiatives and health management for the Company

working hours, the status of leave utilization and other concerns in order to identify issues early and then promptly develop

and its customers.

measures to address them.

Since September 2018, we have been working to strengthen group-wide health promotion measures in cooperation with the

We ensure that the 5S Methodology of “Sort, Set, Shine, Standardize, and Sustain” is fully implemented by our franchise

Lawson Group Health Promotion Office, a body operating under the direct supervision of the President, the Human Resources

stores, and we ensure that the safe operating procedures presented in the operation manual are carefully followed in order

Division, the labor union, the Lawson Health Insurance Society and the health ambassadors established in each department.

to prevent accidents. We also hold safety management meetings company-wide to raise awareness concerning driving

Another important concern is promoting the health of franchise store owners, and we are working through the Lawson

safety among store supervisors and others whose jobs involve driving. When a serious work-related accident occurs, we

Owner Welfare Association to provide a menu of health-related options, including a health check-up subsidy system and theinvestigate and analyze the cause and share our findings internally with the aim of preventing reoccurrence. Also, withestablishment of a health support desk. As a result of our various initiatives, such as efforts tailored to local health concerns, asregard to improvement of the working environment, we emphasize stress check-based employee care, including support

of fiscal 2022, we have been selected as a Health and Productivity Management Brand (for the fourth time) and a Health andfor departmental issue identification and improvement action and implementation of training by industrial physicians.

Productivity Management Outstanding Organization (large-scale corporate sector; seventh year in a row), in recognition of our
status as a company which practices particularly outstanding health and productivity management.

System to promote health and productivity

Setting target value

Chief Sustainability
Officer (CSO) (President)

In terms of KPI for three years from fiscal 2022, we have set values equivalent to pre-pandemic levels for the percentage of
persons in the acceptable value range for the five inspection items and for non-smokers. We conduct follow-ups with employees

Assistant CSO (Chairman, Lawson Health Insurance Society)(Supervising industrial physician)Health and Wellness
Promotion Committee

Human Resources
Division

individually to help them recognize the importance of taking personal responsibility for their own health maintenance andLawson Group Health
Promotion OfficeLawson Health
Insurance Society

improvement and to make changes in their lifestyle accordingly.

Health ambassadors
Overweight

For more information about health-related efforts aimed at Lawson employees
https://www.lawson.jp/en/csr/hrs/

Fiscal 2022
actualChange fromthe previous year

Fiscal 2025
target

46.8%

47.0%

+0.2%

52.0%

75.4%

75.9%

+0.5%

79.0%

72.9%

73.1%

+0.2%

76.0%

Liver function

65.8%

67.7%

+1.9%

72.0%

Lipids

79.5%

80.4%

+0.9%

82.0%

Blood sugar

62.2%

60.8%

-1.4%

66.0%

Non-smoking

70.9%

71.8%

+0.9%

75.0%

Blood pressure

Lawson Group Health Promotion Office members

Males

Fiscal 2021
actualFemales

Percentages of persons in the acceptable range are aggregated totals for persons of all ages who are members of the Lawson Health
Insurance Society.
• Weight: BMI of less than 25, and a waist circumference of less than 85 cm for males and 90 cm for females.
• Lipids: Neutral fats of less than 150 mg / dl and HDL cholesterol of at least 40 mg / dl.
• Blood Pressure: Systolic of less than 130 mm Hg and diastolic of less than 85 mm Hg.
• Blood Sugar: Fasting blood sugar less than 100 mg / dl or HbA1c less than 5.6%.
• Liver Function: AST less than 31, ALT less than 31 and γ-GT less than 51.

45

Society

Human Rights Policy

Introduction

Compliance & Risk Management Committee Meeting& Promotion System• Organized as issues to discuss in the meeting from the perspective of human rights risks
and human rights

Group Human Rights Policy as our top-levelbasic policy on human rights to promote theSDGs and ESG-based management.
To advance the policy, each department,
under the supervision of the CRO, takes theinitiative to promote respect for human rights
in its respective activities. The progress of• Formulate action plans for each task
based on the Human Rights Policy• Request related parties to take action• Check progress of relevant parties
and compile their action responses• Propose initiatives related to respectfor human rights• Update the Human Rights Policy

Sustainability

Corporate Governance

Finance / Company Information

A consultation service contact point for Lawson employees has been established to accommodate requests
for consultation and internal reports regarding compliance and risk management issues, including human rights• Promote through collaboration between the Legal Department,
CR manager, and related departments

Legal Department

Strategy

Consultation service for human rights issues

Lawson Group Human Rights Policy
In June 2021, we established the Lawson

Value Creation

violations.

CR
EachManager divisions

Stakeholders

CR
EachManager divisions

Stakeholders

CR
EachManager divisions

Stakeholders

CR
EachManager divisions

Stakeholders

Consultation/Whistleblower Hotline
https://www.lawson.jp/en/csr/governance/compliance/

Consultation services for all stakeholders
We have established various contact points to accommodate requests for consultation and reports on a wide
range of human rights issues. These include a Supplier Hotline for suppliers, a Crew Hotline for store crews, and an
Owner Hotline for franchise store owners.

initiatives undertaken by each department isregularly reviewed by the Compliance & Risk Management Committee, which is chaired by the CRO.

Stakeholder engagement
Since May 2022, we have participated in the Stakeholder Engagement Program sponsored by the Japan Committee

The Lawson Group Human Rights Policy
https://www.lawson.jp/en/csr/policy/respect/of the Caux Round Table for business leaders. Based on the issues and opinions raised by NPOs/ NGOs, experts,

Lawson conducts human rights due diligence to identify and remedy any negative human rights impacts that mightunderstanding and support of the Lawson Group Human Rights Policy and sharing the status of our efforts to respect

Human rights due diligencescholars, and others, we will continue to apply these activities to our efforts to promote respect for human rights.
We also provide opportunities for dialogue on human rights with our major business partners, calling for theirarise from its business activities. For example, we are aware that foreign workers, including foreign technical interns, arehuman rights.

working in the manufacturing and distribution processes of Private Brand products handled by LAWSON stores. As such,
we closely monitor their human rights circumstances through the development of SAQs (self-assessment questionnaires)and individual dialogues, as well as through other means.
Lawson offers a diverse range of products and services in its stores, and the related stakeholders are equally diverse.
Therefore, the identification of human rights risks is both extensive and complex, and we will continue to address suchrisks on an ongoing basis.
If Lawson is found to have caused or been involved in any negative impact on human rights, we will work to remedy thesituation. Furthermore, the results of human rights due diligence will be regularly evaluated and, if inadequate, corrected.

Affixing “pointing sheets” to cash registers at storesnationwide so hearing-impaired customers can makepurchases more easily
In August 2022, we began affixing paper-based communication
aids to cash registers at LAWSON stores nationwide to help customers
request a shopping bag or plastic cutlery or indicate that they wish foodto be heated. The initiative, which is based on feedback from hearingimpaired employees, was launched to make shopping more convenient.

Human rights education and awareness-raising
Lawson provides a broad range of training, education, and awareness-raising programs, including e-learning
courses that all employees are required to complete, so that all people involved in its business activities understandthe importance of respect for human rights and promote efforts to respect human rights.
Human rights training
https://www.lawson.jp/en/csr/human_rights/

In response to positive feedback from numerous customers who
praised it for letting them shop with peace of mind, we created a “communication board” that builds on the aids
used at cash registers and made it available on our official website and in our official app starting March 1, 2023.
We will continue to strive to realize a society in which everyone can go about daily life with peace of mind by
drawing on assistance to help them communicate while shopping.

46

Society

Building Society- and Environment-Friendly Supply Chains

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Initiatives with suppliers

Promoting fair transactions
In order to build relationships of trust with its suppliers, Lawson has established The Lawson Group Corporate Conduct

Business partner questionnaire

Charter and The Lawson Code of Ethics, which stipulate that we conduct fair and transparent purchasing in sincerity

In addition, in order to review our own business relationships, we conduct an annual supplier questionnaire,and good faith. We dedicate considerable resources to educating employees whose responsibilities include dealing withwhich we ask our suppliers to fill out anonymously as a means of identifying problems and issues in our businesssuppliers to ensure they don’t misuse their position of dominance to coerce vendors, and we offer a range of training

relationships. The results of these surveys are reported to management every year, and feedback is provided at

programs, including e-learning courses for all employees. In 2021, as part of the Declaration of Partnership Building

divisional meetings and training sessions. We also provide feedback to suppliers who have sent us questionnaires,

initiative, Lawson declared that it will build new partnerships by promoting cooperation, coexistence, and co-prosperity

and present them with the Lawson Group’s suggestions for measures for improvement.

with suppliers and value-creating businesses in its supply chain. We will promote coexistence and co-prosperity throughout

In addition to drawing on feedback from business partners to reassess and improve compliance and risk

the entire supply chain, new collaborations irrespective of factors like business size and affiliation, and compliance withmanagement structures, we’ve put in place structures to help us work with vendors to resolve issues, for example

desirable business practices between the parent company and subcontractors.

by identifying and addressing their root causes.

Lawson Group Corporate Conduct Charter
https://www.lawson.jp/en/csr/policy/action_guideline/
Lawson Code of Ethics
https://www.lawson.jp/en/csr/policy/ethics/

Number of questionnaire recipients* and number of responses
Fiscal 2020

Fiscal 2021

Fiscal 2022

Number of recipients

1,259

1,265

1,228

Number of responses

972

955

922

77.2%

75.5%

75.1%

Response rate

Revising purchasing and procurement
policy and raising awareness

Number of vendors to which we’ve provided
information about the Group’s policies(Fiscal year)

In a world of far-flung raw material vendors,
a supply chain-wide effort is required to satisfy
customers’ demand for products and services madein an appropriate environment. We’ve put in place

Group companies
Lawson Entertainment
LAWSON STORE 100

2021

2022

Number of copies mailed
98
98
176

*When we conduct multiple transactions with a single business partner, we ask each coordinator to respond to the questionnaire separately.

Supplier sustainability questionnaire
In fiscal 2022, we began administering a Supplier Sustainability Questionnaire to review the status of business

175

partners’ sustainability initiatives. The questionnaire is designed to solicit information about initiatives undertaken by

the Lawson Group Purchasing Policy for vendors to

SCI

263

187

some 900 suppliers to address issues such as human rights problems and climate change, and to forge collaborative

Lawson718

764

address issues such as customer safety and peace

structures to help us work with business partners to resolve social and environmental issues.

Total

1,255

1,224

of mind, legal compliance, fair and sound businessactivities (for example, to eliminate relationships with organized crime and prevent corruption), respect for human rights (forexample, to prevent participation in discrimination and human rights violations), and development of an appropriate work
environment (for example, to prevent child labor and forced labor, reduce overtime, and ensure payment of fair wages). We
give preference to transactions with business partners who support this policy. We’ve also formulated the Lawson Group
Purchasing Policy with the goal of realizing supply chains that are sustainable for the Earth’s environment and for society
as part of our ongoing drive to achieve sustainable procurement.

We also conduct human rights audits to review the actual status of suppliers’ initiatives, and we will continue towork to assess and augment business partners’ initiatives in the future while expanding the scope of related reviews
alongside the Sustainability Questionnaire.
Results of the fiscal 2022 supplier sustainability questionnaire
Targeted suppliers
857

Number of companies responding
500

Response rate
58.3%

Lawson Group Purchasing Policy
https://www.lawson.jp/en/csr/policy/transaction/
Lawson Group Procurement Policy
https://www.lawson.jp/en/csr/policy/procurement/
47

Executives

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Members of the Board As of May 24, 2023

Sadanobu Takemasu

Masayuki Itonaga

Miki Iwamura

Years as a Member of the Board: 9
President and CEO, Representative Director,
Chairman of the Board, and CSO

Years as a Member of the Board: 1
Member of the Board, Executive Managing Officer, CFO

Years as a Member of the Board: 5
Member of the Board (outside)
Lead Independent Outside Director

Born in 1969; 53 years old. Appointed Senior Executive Vice
President, Representative Director in 2014. Appointed President
and CEO, and 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 and the achievement of sustainable corporate management
as President and CEO, Representative Director, Chairman of theBoard, and CSO* of Lawson, Inc.

Born in 1967; 56 years old. Through his duties at Mitsubishi
Corporation and secondment at overseas companies, among
others, Mr. Itonaga has gained extensive knowledge acrossall areas of management with a focus on financial affairs andaccounting. He has also gained a deep knowledge of all areasof corporate management from serving as the Representative
Director and President of Mitsubishi Corporation Financial andManagement Services (Japan) Ltd., a subsidiary of Mitsubishi
Corporation.

Independent officer

Born in 1965; 57 years old. Ms. Iwamura has been proactively
making suggestions and disseminating information on workstylereforms and the promotion of women’s advancement in theworkplace. 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 Japanregion for a global IT company.

Satoko Suzuki

Independent officer

Kiyotaka Kikuchi

Years as a Member of the Board: 3
Member of the Board (outside)

Years as a Member of the Board: 2
Member of the Board

Born in 1977; 45 years old. Ms. Suzuki has served as amember of public and private committees related to “hospitality
management” and “globalization of the service industry.” 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 brandmanagement.

Born in 1966; 56 years old. Mr. Kikuchi has deep 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.

Keiko Yoshida

Yuko Miyata*CSO: Chief Sustainability Officer

Corporate auditors As of May 24, 2023

Shuichi Imagawa

Jun Miyazaki

Yuko Gomi

Years as Corporate Auditor: 3Standing Corporate Auditor

Years as Corporate Auditor: 2Standing Corporate Auditor

Years as Corporate Auditor: 4Corporate Auditor (outside)

Years as Corporate Auditor: 3
Corporate Auditor (outside)

Year as Corporate Auditor: 0
Corporate Auditor (outside)

Born in 1958; 64 years old. Mr. Imagawa has expertise incompliance and risk management, as well as convenience store
operations and the franchise business, based on experienceacquired as manager in charge of the Store Operation Division,
Product and Logistics Division, branch manager, vice presidentof CVS Operations Company in Japan, head of the Sales Division
and CR and Human Resources Executive Officer.

Born in 1955; 67 years old. Mr. Miyazaki has expertise inconvenience store operations and the franchise business, aswell 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.

Born in 1972; 51 years old. Ms. Gomi has extensive businessexperience and broad insight based on her wealth of experiencein 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.

Born in 1954; 69 years old. As a certified public accountant,
Ms. Yoshida is a representative of an accounting firm and hasa deep knowledge of tax affairs, accounting and management.

Born in 1964; 58 years old. She has extensive experiencein human resources and labor affairs at global companies,
including serving as member of the Board and head of HR andGeneral Affairs at Unilever Japan K.K., as well as executive
officer and general manager of the Human Resources Divisionof Bayer Holding Ltd.

Independent officer

Independent officer

Independent officer

48

Executives

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Members of the Board and Corporate Auditors As of May 24, 2023

Name

PositionIndependent
OutsideOfficer

Nomination and Number ofCompensation
years in
Advisory
current
Committee
position

Main area of experience and expertise
Responsibilities and concurrent positions

Corporate
management

Corporatefinance/accounting

Legal affairs/
complianceand riskMarketing

IT/DX

✓

✓

Global experi- Franchise andretail business
ence

Member of the Board

Sadanobu
Takemasu

President and CEO,
Representative Director,
Chairman of the Board

9

CSO

✓

Masayuki
Itonaga

Member of the Board,
Executive Managing Officer

1

CFO

✓

Miki
IwamuraMember of the Board

✓

✓

5

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

SatokoSuzukiMember of the Board

✓

✓

3

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

Kiyotaka
KikuchiMember of the Board✓

2

Executive Vice President and Group CEO,
Consumer Industry Group, Mitsubishi
Corporation

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Corporate Auditor

ShuichiImagawa

Standing Corporate Auditor

3

—

✓

✓

✓

Jun
MiyazakiStanding Corporate Auditor

2

—

✓

✓

✓

Yuko
Gomi

Corporate Auditor

✓

✓

4

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

✓

Keiko
YoshidaCorporate Auditor

✓

✓

3

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

Yuko
MiyataCorporate Auditor

✓

✓

0

HR consultant (sole proprietorship)

✓

✓

✓

✓

✓

49

A Discussion by Outside Directors

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Continue to question
the strategy and will
towards growth
Two of Lawson’s five directors are female outside
directors, each with expertise in their respective field.
The two, one an executive at a global IT company andthe other an associate professor at a university, discussed
the current state of Lawson’s board of directors and thechallenges faced.

Miki Iwamura

Satoko Suzuki

Years as a board member: 5

Years as a board member: 3

Focus on free discussion, a broad point of view,and quality discussion

from a broad perspective.

Ms. Iwamura One of the characteristics of Lawson’s board of directors is extremely free and diverse discussions.

Ms. Iwamura For example, recently President Takemasu, CFO Itonaga, and other directors and executive leaders

At Google Japan, where I work, we emphasize psychological safety. At Lawson as well, inside and outside directors

have demonstrated clear leadership in their respective positions, and the results have been reflected in the businessand corporate auditors with diverse backgrounds openly express their opinions and questions beyond their own

performance and stock price. President Takemasu has taken the lead in promoting growth strategies and leading

areas of expertise, and discussions are held in an environment of psychological safety.

company-wide discussions with a high level of enthusiasm and dialogue equality. CFO Itonaga has also been

Ms. Suzuki I agree. Members of the board of directors of Lawson rotate when necessary, so fresh perspectives

proactive in proposing shareholder return policies and other measures while keeping an eye on market conditions,are always introduced. The evaluation of the effectiveness of the board of directors also functions well, and I feelthereby enhancing Lawson’s reputation in the market. As for overseas business, the board of directors has beenthat each director reflects their own role in their awareness of the quality of discussions and the need to see things

coming up with new proposals, which is very encouraging.
50

A Discussion by Outside Directors

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Ms. Suzuki Let me add that President Takemasu has strong ideas about the new image of convenience stores

entertainment. He is also looking at ways to provide new value in the convenience store itself.

and their role as social infrastructure. I am encouraged by the various reforms he is undertaking to realize this vision.

Ms. Iwamura I also think that the most significant recent achievement was the discussion we had on what our

It is also encouraging to see the introduction of the area company system, which aims for community-based store

medium- and long-term growth strategies should be. In considering our growth strategies and business portfolio,

management and the nurturing of the next generation of leaders in each region.

we were able to meaningfully discuss where to find growth drivers, how much to accelerate investment, and how to

Ms. Iwamura The directors are also discussing the need for a clear succession plan at Lawson.

delegate authority in the area company system.

Ms. Suzuki President Takemasu is always conscious of nurturing the next generation; for example, by having

I have been at Google Japan for a long time, so I know firsthand what it means to grow a business. Based on my

manager and leader classes at the in-house Lawson University. I feel that strategic thinking is being developed

knowledge of marketing, I always ask the Lawson management team how they plan to grow, whether they always

throughout the entire organization.

have the seeds for growth, and whether they are communicating their vision in an easy-to-understand manner.

Importance of mechanisms that reflect diversity and expertise

Dynamic discussions realize innovation

Ms. Suzuki In fiscal 2022, an assessment of the board of directors’ effectiveness was conducted by an external

Ms. Iwamura I believe that IT investment is an important part of creating a new convenience store model in the

consultant. We believe that it is important to use the results of this evaluation to further improve the effectiveness of

future. Besides the renewal of legacy systems, our response to new technologies such as generative AI is important.

the board by strengthening its governance and continuing to have frank and open discussions. It is also important to

We need to promote discussions at board meetings in areas such as the establishment of internal and externalbe aware of diversity and to have the board represent a varied cross-section of people.

structures so that we can accumulate knowledge within the organization and take the lead in development while

Ms. Iwamura In terms of diversity, there are not enough women on the executive board. More foreign nationals

flexibly incorporating new technologies.

are also needed in order to promote overseas expansion. IT human capital will also be needed due to their growing

Ms. Suzuki I see that the retail industry often thinks about things from a short-to-medium-term perspective, but

importance in the retail industry. How can we create a system that reflects such diversity and expertise in governance?

I think it is also necessary to have backcasting discussions in which we reconfigure things with a slightly long-term

At meetings of independent outside directors, which I now chair, we exchange opinions on a wide range of issues

strategic mindset.

that are not usually brought up at board meetings, such as the long-term future of the company. These meetings

Ms. Iwamura I too want to focus on growth, so I think it is important to have thorough discussions on how to

are important for Lawson, which is listed as a subsidiary, to ensure that the opinions of minority shareholders arebuild a long-term growth model. In order to achieve innovation, instead of growing just a few percent we should

appropriately reflected in management.

be looking for ways to grow 10-fold. Furthermore, we must be dynamic enough to step on the gas and accelerate
growth while simultaneously discussing what the trade-offs are. While the role of the board of directors is tosupervise management, I believe it is important for outside directors to continue to question the will for growth in

From pandemic response to medium- and long-term strategies

this era of rapid change.

Ms. Suzuki During the pandemic of the past few years, there were many short-term discussions about Lawson,
but since the latter half of fiscal 2022 we have been able to discuss the company’s medium- and long-term growthstrategy. I believe that there are limits to growth in Japan, where the birthrate is declining and the population
is aging, and that it is necessary to take measures aimed at overseas markets. President Takemasu, however,has stated emphatically that there is still room for growth in Japan and that a variety of initiatives are possible.
Using convenience stores as a starting point, he is looking at various possibilities, such as financial services and51

Corporate GovernanceIntroduction

Characteristics of Corporate GovernanceValue Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

but Lawson’s internal organizations make independent decisions regarding management and business activities in general,

We believe that continuous improvement in the value we offer stakeholders contributes to the enhancement of Lawson’s

ensuring Lawson’s independence as a listed company conducting business operations.

corporate value. Accordingly, we strive not only to comply with laws, regulations and social norms but, also, to reinforce

In addition, in the business alliance agreements concluded with Mitsubishi Corporation, it has agreed to conduct a

our corporate governance by improving the soundness and transparency of management through honest and consideratebusiness alliance that respects Lawson’s independence and autonomy. We recognize that our independence is ensured

behavior grounded in high ethical standards which are based on the Group Philosophy, the Lawson Group Corporate

by our parent company.

Conduct Charter and the Lawson Code of Ethics. It also requires active disclosure in accordance with the “Basic Principles

As an independent listed company, Lawson determines the terms and conditions of transactions after comparing andConcerning Information Disclosure.”

examining the prices offered by other companies, prevailing market prices, etc., even in transactions with Mitsubishi

Lawson selects people with different specialties and experience as candidates for membership of the Board to

Corporation, Lawson’s parent company, and its group companies, just like in transactions in general, in order to notassure diversity on the Board of Directors and enable appropriate decision-making and supervision. In addition to thedisadvantage minority shareholders.

independence standards determined by Tokyo Stock Exchange, Inc., Lawson has established its own Judgment Criteria

Also, a Special Committee may be established voluntary to deliberate and review material transactions or actions that

Regarding Independence as a basis for selecting several independent officers (one-third or more for members of theinvolve a conflict of interest between Mitsubishi Corporation and minority shareholders. The Committee, comprised of five

Board) for purposes of ensuring management transparency and fairness. Moreover, by introducing the Executive Officer

members, including the head of the Committee, who are independent outside directors and independent outside corporate

System, we have separated management and supervision from business execution to enable quick decision-making

auditors that are independent from the parent company, provides a structure for reviewing the necessity, rationality, validityand business execution. It should be noted, with respect to the corporate auditors, that we elect candidates for theand fairness of the material transactions or actions based on a high level of independence, and for reporting to the Board

position of corporate auditor based on their possession of the extensive financial, accounting, risk management and/orof Directors.

For more information about Corporate Governancehttps://www.lawson.jp/en/csr/governance/

legal expertise and experience required to fulfill auditors’ duties. Recognizing that the succession plan for the CEO andPresident is an important managerial issue, in order to raise
the level of procedural objectivity, timeliness and transparency,

Details of major corporate governance measures implemented since 2000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

discussions shall be held by the Nomination and Compensation
Advisory Committee, which is a consultative body to the Boardof Directors and is composed solely of part-time officers (fiveout of a total of six of whom are independent officers), andthe Representative Director and President shall present to thisCommittee the qualities and attributes required of the CEO of

Members of the
18
20
Board (persons)Outside members
2of the Board (persons)Subset who are independent
officers (persons)Female membersof the Board (persons)the Company and the method of nominating the successor, andshall gain its approval.

Special circumstances with the potential
to seriously 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,

8
3

9

9*

1

7

5

3

4
1

1

2

7
3*

2

5

2

2002 – Compensation Advisory Committee established.
Ensuring
transparencyof Board members’
compensation

8

5
2

3

2

3

2

2014 – Nomination and Compensation Advisory Committee established.

2005 – Board members’ retirement benefit system abolished.
2005 – Share-based stock compensation options for members of the Board introduced.
2012 – Corporate auditors’ retirement benefit system abolished.

Ratio of shares heldby Mitsubishi
Corporation(major movements)

2001 – Mitsubishi Corporation becomes largest shareholder.

April 2015

February 201733.4% 50.1%*1 The number of members of the Board is as of the close of the General Meeting of Shareholders each year. An exception to this was 2014, when there were nine members of the Board up to July 31 and eight members after August 1.
*2 The 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 ratio of shares held by Mitsubishi Corporation.

52

Corporate GovernanceIntroduction

Corporate Governance System

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Operation status of the Board of Directors

Equipped with an agile decision-making process, Lawson has moved quickly to construct a highly transparent

The Company’s Board of Directors is made up of five members of the Board, including three males and two females,

and independent corporate governance system. Independent officers who are considered to have no conflict of

two of whom are independent members of the Board. The Board of Directors not only decides important management

interest with general shareholders have been appointed to comprise at least one-third of the members of the Board.

matters, such as issues stipulated by laws and regulations and the Articles of Incorporation, but also monitors the conduct

Moreover, with a view to promoting diversity with the composition of the executive officers taken into consideration,of business operations by the members of the Board. The Board met 12 times in fiscal 2022. Furthermore, the Company

five women have been appointed to the position of member of the Board or corporate auditor. They are contributing

has adopted an executive officer system and entrusts authority to executive officers to expedite business execution.

to reinforcing the corporate governance system from various perspectives. Following the voluntary establishment ofMoreover, the Company holds management meetings as a supplementary decision-making body to the Board of Directors.

the Nomination and Compensation Advisory Committee to express its opinion on the candidates for the positions of

The management meetings are comprised of personnel who are generally of executive managing officer level or above andmember of the Board and representative director on the Board of Directors, independent officers have been selected

members designated by the president and CEO (and met 14 times in fiscal 2022).

to fill five of six positions as Committee members, thus creating a system where opinions can be expressed with ahigh degree of independence. Going forward, we will continue our efforts to ensure management transparency andindependence and to improve corporate value to meet the expectations of all our stakeholders.
Corporate Governance System (as of May 25, 2023)

General Meeting of Shareholders
Nomination and Compensation
Advisory Committee
Non-executive directors
or part-time outside
corporate auditors: 6(5 of whom are independent officers)

Special Committee

Appointment
and dismissal

Appointment
and dismissal

Appointment
and dismissal

Consult
ProposeAuditing

Auditing

Board of Directors
Outside members of the Board: 2(2 of whom are independent officers)
In-house directors: 3
Total: 5

Outside corporate auditors: 3(3 of whom are independent directors)
In-house corporate auditors: 2
Total: 5

Consult

Operational Organization
Financial Reporting Internal Control Committee

Discussion andreporting

The following is the activity status of the Nomination and Compensation Advisory Committee, comprised of part-timeCommittee Activity Status

President

Fiscal 2022 attendance rate

Management meeting
Internal Audit OfficeCompliance & Risk Management Committee

Corporate divisions

Lawyers
Comments

Name

Matters for deliberation

Composition

Division and Company

OutsideOutsideOutsideofmembers of members of members of Members
the Board
the Board
the Board
the Board
Keiko
Kiyotaka
Miki
SatokoHayashiIwamuraSuzukiRetired in May
Kikuchi
2022

Outsidecorporate
auditors
Eiko
Tsujiyama

Outsidecorporate
auditors

Outsidecorporate
auditors

Yuko
Gomi

Keiko
YoshidaRetired in May
2023

Nomination andCompensation
Advisory Committee

Director compensation (system,
evaluation, etc.) and director candidate
and representative director candidate Part-time
consultation, successor planning officers only
deliberation, recommendations to theBoard of Directors

100%(Attend 2/2
meetings)

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

Special Committee

Advance deliberation of matters for the
Board of Directors related to important Independenttransactions with Mitsubishi Corporation officers only
and its subsidiaries—

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)—

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

100%(Attend 3/3
meetings)

Investment and management

Subsidiaries and Affiliates• Results of evaluation of Board of Directors’ effectiveness• Financial reporting internal control-related matters• Revision of important rules• Policy on strategically-held shares• Revision of corporate governance reporting• Accounting-related matters• General meeting of shareholders-related matters• Business execution status reporting• Conflict of interest transaction approval/reporting

officers, and the Special Committee.

Auditing

SDGs Committee
Information Security Management Committee• Management strategy for next fiscal year
• Organizational structure for next fiscal year
• Officer appointment• Officer compensation• Revision of Lawson Group Corporate Conduct Charter• Action Plan for Lawson Group’s Challenge 2025
• Company-wide digital transformation policy• Report for major KPI company-wide• Continuity of subsidiary business• Internal control system development basic policy

Status of committees
Accounting
auditing

Outside members of the Board: 2
Outside corporate auditors: 3 Propose(5 of whom are independent officers)

Appointment, dismissaland supervision

Certified public
accountant

Audit & Supervisory Board Dismissal

Main agenda items for the Board of Directors (fiscal 2022)

53

Corporate Governance

Policy on nomination and standards for appointment
and independence of candidates for member of the Board
Lawson has established criteria for appointing officers and for making judgments regarding independence.
The voluntarily established Nomination and Compensation Advisory Committee serves as an advisory body and,moreover, expresses its opinion to the Board of Directors regarding nominations of candidates for the positions ofmember of the Board and representative director. It should be noted with respect to candidates for corporate auditor
that they are individuals with the financial, accounting, risk management and/or legal experience and expertise
required to fulfill the duties of corporate auditors whose candidacy is approved by the Audit & Supervisory Board.
For more information about appointment criteria for officers and judgment criteria regarding independence
https://www.lawson.jp/en/csr/governance/

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

3. High-level communication skills
4. Broad perspectives for viewing the Group as a whole and strong commitment to governance
5. High ethical standards
The attributes for the successor do not specify whether they need to be from inside or outside of the Company.
When selecting successors, multiple candidates are presented to the Nomination and Compensation Advisory
Committee.

Officers’ Compensation
Basic policy
Lawson’s policy is to design its remuneration system in a manner that links Board members’ compensation withreturns to shareholders, while retaining its function as an incentive for enhancement of corporate value, continuous

Support systems for outside members of the Board and outside corporate auditors

growth and improvement of corporate performance and ensuring a sufficient and appropriate level of remuneration

The Board of Directors Secretariat is established to conduct administrative tasks for the Board of Directors,

compensation component linked to the Company’s performance, moreover, as well as a fixed compensation

communicate with the part-time officers, and submit reports each time an incident/accident occurs. The Corporate

component. In order to more clearly reflect the contribution of Board members to improving shareholder value,

Auditors Office, with two full-time staff members, is established to support the corporate auditors in their duties,

variable compensation operates in tandem with indicators such as EPS (earnings per share) and SDGs targets

conduct administrative tasks for the Audit & Supervisory Board, and communicate with the outside corporate auditors.

(CO2 emissions reduction rate, etc.). Share-based stock options – share price-linked compensation – are also

Outside officers are provided with opportunities to acquire essential knowledge concerning the operations,

to reward individual members of the Board for the duties they perform. The base compensation includes a variable

incorporated as part of the remuneration to strengthen the linkage with returns to shareholders.

finances, organization, etc., of the Group. Furthermore, to enable them to deepen their understanding of the Group’sbusiness, they are given the opportunity to participate in key events and to tour Group-related facilities. In order for
independent outside officers to actively contribute to discussions at the Board of Directors’ meetings, the Company
is set to hold meetings to exchange opinions with only independent outside officers at least once a year.

Succession planning for chief executive officers
Lawson recognizes that the succession plan of the president and CEO is a key management issue; thus, acting
as an advisory body to the Board of Directors in order to augment the impartiality, timeliness, and transparency ofthe process, discussions are carried out among members of the Nomination and Compensation Advisory Committee,
comprised only from part-time officers (five members out of the total six are independent officers), which determines
the qualifications and attributes required as Lawson’s chief executive officer as described below. Then, the methodof developing and nominating the successor is presented to the committee by the President and CEO for approval.
1. Ability to respond to change and power to create change
2. Strong leadership

A + B =Board members’ compensation
A Base compensation
Consisting of: fixed compensation (about 60%) + variable compensation (about 40%)
Fixed compensation:An amount commensurate with the position determined based on internal rules
Variable compensation:Using performance-linked compensation that combines performance evaluation for EPS(earnings per share) for each term and an evaluation of SDGs targets (CO2 emissions reduction rate, etc.)(in order for Board member compensation to operate in line with shareholder profits)

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 accordancewith the Board 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)54

Corporate GovernanceIntroduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Results of analysis and assessment by an external organization

Details of Board members’ compensation
Board members’ compensation paid by Lawson consists of A base compensation through cash payments and B share price-linked• Directors and corporate auditors actively exchange opinions at the Board of Directors’ meetings, and business execution

compensation through stock option allocations. Note that no performance-based variable compensation is paid to part-time members

is monitored based on candid reporting from the execution side, indicating that each officer is actively engaged in fulfillinof the Board, because they serve the representative directors and Board of Directors in a specialized supervisory and advisory capacity.

his/her supervisory function.
• In order to make the Board of Directors more effective, it is desirable to conduct discussions and share information by

Details of corporate auditors’ compensation
Corporate auditors’ compensation is determined according to a basic policy of paying compensation at a sufficient and appropriate

prioritizing the following points.

level in consideration of the duties performed by individual corporate auditors. It comprises base compensation (fixed compensation)

1.Sharing important agendas to be determined by the Board of Directors (medium-term strategy, business portfolio, etc.)

paid in cash. The amount is determined through consultation with the corporate auditors, with consideration given to such factors

2.Reviewing monitoring targets and monitoring methods by the Board of Directors (including verification of the validity ofas full-time or part-time status and share of the auditing work, within a range approved by the General Meeting of Shareholders.

current rules and standards)

Disclosure method for officers’ compensation

3.Composition of the Board of Directors, etc.
• Since Lawson is listed as a subsidiary, it is also very important to ensure that matters can be explained to minority

Total amounts of officers’ compensation are listed in the Company’s securities reports and business reports.

shareholders and other stakeholders.

Details of officers’ compensation (fiscal 2022)

Total compensation, total amounts by type of compensation and number of eligible officers per company officer category
Board of Directors and Audit & Supervisory Board member compensation amount
Category

Total
compensation

Members of the Board(subset who are outside
members of the Board)
Corporate auditors(subset who are outside
corporate auditors)
Total

202

Total by type of compensation
Stock options
Fixed compensation Variable compensation
104
59
38

(Millions of yen)
Number of eligible
officers
8

(25)

(22)

(—)

(3)

(3)

84

84

—

—

5

(36)

(36)

(—)

(—)

(3)

286

188

59

38

13

Note: There were five members of the Board and five corporate auditors as of the end of February 2023.

Assessment of the Board of Directors’ effectiveness• In advancing the above discussion and information sharing, it is extremely important for the execution side to share
information. It is recommended that the content and level of detail of information required for discussion, and theselection and priority of initiatives, be sufficiently coordinated with the execution side.
Going forward, in addition to the results of the aforementioned evaluation results of the effectiveness of the Board of
Directors, we will refer to discussions at the opinion exchange meeting by independent officers and the Board of Directors’
meetings to enhance discussions on medium- and long-term management issues and the role of the Board of Directors,
and will further improve the operation of the Board of Directors to enhance the effectiveness of the Board of Directors.

Strategically-held shares
Lawson sometimes holds listed shares strategically forthe purpose of raising its value over the medium- and long-

In order to further enforce the effectiveness and functions of the Board of Directors, the Company conducts a “self-assessment on theterm through cooperation each other, but we endeavor toeffectiveness of the Board of Directors” every year, mainly consisting of a document survey to be completed by all members of the Board

keep such holdings to the minimum required. When acquiringand corporate auditors. For this survey, responses from all members of the Board of Directors and Audit & Supervisory Board members are

such holdings, we perform a detailed investigation for eachcompiled and analyzed. Every three years, an external assessment is conducted, and such an assessment was performed in fiscal 2022.

individual issue to ascertain whether the purpose of holding[ Summary of external evaluation results]

is appropriate, whether the benefits and risks associated

1.External consultants conducted surveys and individual interviews with all officers

with holding are commensurate with the cost of capital, etc.

2.External consultants reviewed and analyzed materials for the Board of Directors’ meetings and analyzed andFurthermore, each year the Board of Directors reviews theevaluated the results of surveys and interviews
3.Independent officers held meetings to exchange opinions on evaluation results

appropriateness of holdings, and, as of the end of February
2023, we held three different listed stocks.

Number of specified investment stocks / balance sheet amount
Number of stocks (left axis)
Balance sheet amount (right axis)

54

5
11,162

15,000

4
8,339

3

4

12,000

3
7,009

2

9,000

2

6,000

1
0
(Stock)

3,000

2018

2019

2020

192

483

2021

2022 year

Fiscal Millionsof yen0

4.Reported the analysis and evaluation results to the Board of Directors and conducted discussions
55

Compliance and Risk Management

Internal Control

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Assuring continuity of business operations

The business of Lawson Group encompasses a wide-range of operations, from the core business of convenience

At Lawson, we have defined those basic business continuity management (BCM) matters that need to be

stores to high-end supermarkets and entertainment-related business, to financial, e-commerce, and consulting

addressed in the event that there is a functional failure of our management resources or a large number of ourservices. We operate a large number of LAWSON stores, covering every prefecture in Japan and several markets

employees are unable to perform their work duties.

overseas, each of which offers a wide variety of products and services. As such, we are not only required to observevarious laws and regulations but must also assess the diverse range of possible risks and implement the appropriate
countermeasures. In light of these characteristics, Lawson has established the Basic Policy for Maintaining an

Business continuity management (BCM) basic policy• Maintaining the Lawson brandInternal Control System to support its efforts to achieve healthy, sustainable growth. We are promoting maintenance

Under our Group philosophy of “Creating Happiness and Harmony in Our Communities,” and with a strongof our internal control system based on this policy, while responding to changes in our management environment,

awareness of our corporate social responsibility, we will endeavor to pursue store operations which prioritize humanconducting periodic reviews of the policy itself, and endeavoring to maintain and enhance an effective, practicallife and safety, even during large-scale disasters and other times of great risk, to supply products and services thatinternal control system.

maintain the Lawson brand by fulfilling our mission as a “community lifeline.”
For more information about the internal control system
https://www.lawson.jp/en/csr/governance/• Continuation of the franchise businessWe will continue to develop our franchise business so that, even in the event of serious risks, we can ensure agiven, essential level of operations required of a franchise headquarters, specifying the timeline and means by which

Compliance and Risk Management Systembusiness and operations will be restored so that franchise business can continue.
• Securing appropriate earnings

Lawson has established a compliance and risk management framework so that all employees can take action

In order to put into practice our Group philosophy of “Creating Happiness and Harmony in Our Communities,” webased on the Corporate Conduct Charter and the Lawson Code of Ethics. We implement an ongoing PDCA cycle while

will ensure (generate) a level of profitability which is appropriate and essential to our survival as a company. Towards

maintaining an organic link between our behavioral standards, education and training, communication functions andthat end, we will formulate countermeasures that take into consideration the impact on earnings that serious risks,monitoring activities for the purpose of ensuring we are a good corporate citizen acting with high ethical standards,

as well as social conditions, laws and other factors, may have.

integrity and compassion.
• Preparing for disasters and helping communities to recover
The Lawson Group seeks to not only to be prepared in the event of a disaster but also to serve as a community

For more information about compliancehttps://www.lawson.jp/en/csr/governance/compliance/

lifeline afterwards by acting swiftly to ensure the continuity of store operations. Also, to support those affected by

For more information about risk management
https://www.lawson.jp/en/csr/governance/risk/

well as to raise disaster relief funds and provide other assistance.

disaster, we work with local governments to deliver food, daily necessities and other emergency relief supplies, as

For more information about continuity of business
https://www.lawson.jp/en/csr/governance/continuation/

56

Compliance and Risk Management

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Business Risks
Company-wide risk matrix (Excerpt of major risks only)

CategoryNo.

Main risks
Risks related to M&A and

Impact① business alliances

⑨

⑤

⑩

High

⑦
⑯

Risks related to the franchise② store business
Management strategy risks⑮

Risks related to the banking③ business

Risks related to raw materials

⑬

①

④

②

③

Risk response measures• When entering into agreements, such as acquiring shares or forming a business alliance: conduct prior study (such as
third-party surveys, etc.); facilitate decision-making by formulating detailed business plans and clear criteria forwithdrawing from an agreement; and periodically monitor the agreement afterwards.
• Provide sufficient information and appropriate support through daily communication with franchise stores to prevent
misconduct incidents, etc.
• Build partnerships with franchise stores by conducting various initiatives for continued stable store operations.
• Compliance with laws and regulations through compliance training, etc., at Lawson Bank, Inc.
• Respond to environmental changes by sharing information through regular communication between Lawson Bank, Inc.
and the Company, and examination of synergy creation.

④ procurement• Secure substitute materials, identical raw materials from different production areas, and multiple procurement channels.

⑤ Risks related to climate change• Formulate countermeasures, such as risk avoidance, mitigation and insured transfer, of risks based on an evaluation of
their degree of impact on business.

Medium• Perform a detailed investment profitability analysis when acquiring tangible fixed assets.

⑥⑪⑥ Risks related to asset impairment • Perform credit checks as necessary on new suppliers and other business associates, and perform thorough⑫

management of existing receivables and other such assets.

Financial risk⑭

Risks related to funding⑦ procurement

Risks related to exchange rate

⑧ fluctuation

Low

Operational risks

Low

MediumHigh• Work with suppliers and stores to ensure quality management, hygiene management and expiry date managementfrom the production process through to delivery and sales.
• Develop a system for pre-checks and information storage in order to ensure proper labeling.

⑩ Risks related to IT systems• Implement multifaceted countermeasures for cyber security, including technical, process/personnel, and physicalaspects, as well as training in preparation

Risks related to handling ofFrequency[Frequency]
High: Trending upwardMedium: Largely unchanging
Low: Trending downward⑪ personal information• Thoroughly promote information security measures and Lawson Group Privacy Policy inside the Group.

⑫ Risks related to reputation• Implement compliance/risk management training.
• When a problem arises, provide prompt information disclosure to minimize the impact on customers and other relevant parties.

⑬ Risks related to laws, regulations, etc. • Continually gather and analyze information about legal and regulatory revisions, etc., and respond proactively.

[Impact]
High: Disruption of business which lasts a month or more,damages of 10 billion yen or more...etc.
Medium: Disruption of business which lasts between a week to just under a month,damages of between 2 billion and just under 10 billion yen...etc.
Low: Disruption of business which lasts a week, damages below 2 billion yen...etc.

• Diversify the contract volume and timing for products, raw materials, etc., procured overseas.

⑨ safety

Risks related to food product⑧• Diversify fund procurement sources and means.
• Pay close attention to market trends, such as for interest rates; diversify funding procurement sources and lending
periods; and procure funding at fixed interest rates.

Compliance risks⑭ Risks related to human rights• Formulate a Lawson Group Human Rights Policy and ensure it is pursued by promoting human rights due diligence.
• Conduct supplier surveys and individual dialog, CSR audit and in-house training related to “business and human rights.”• Establish a consultation service for employees and suppliers, and provide corrective/remedial action.

⑮

Risks related to disasters• Conduct training three times per year which prioritizes human life and safety, and ensure the effectiveness of theDisaster Relief Manual and other resources.
• Develop a business continuity management (BCM) structure, and formulate business continuity plans (BCP) for
responding to anticipated scenarios, such as an earthquake with its epicenter in Tokyo.

⑯ Risks related to COVID-19• Develop a business continuity management-related structure, rules, etc., that will ensure a given, essential level ofoperations required of a franchise headquarters.
• Under the leadership of the Lawson Group Sweeping Transformation Executive Committee, tackle the challenge ofanticipating new needs and adapting to the new normal.

Hazard risks

57

Finance / Company Information

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Eleven-Year Financial Summary

Finance / Company Information(Unit: Millions of yen)

2022

(Fiscal year)

2021

2020

2019

2018

For the year:
Gross operating revenue
Income from franchised stores¥

251,564¥

291,802604,812Net sales¥

292,237

288,480¥

275,945314,260¥

302,843

302,136
288,579

Other operating revenue

132,244

114,331

101,576

113,132

109,931

Total gross operating revenue

988,621698,371

666,001

730,236

700,647

Operating income

55,05647,09640,876

62,94360,781

Profit attributable to owners of the parent

24,68917,9008,689

20,10825,585
128,594

Net cash provided by operating activities

176,045

146,644

227,954

202,703

Net cash used in investing activities(45,626)(51,781)(29,983)(49,074)(81,017)

Net cash used in (provided by) financing activities(124,028)(109,516)(140,642)(163,910)

277,937

Capital expenditures

88,02686,351

48,83790,726140,071

Depreciation and amortization*2

84,84879,94280,77879,183

66,844

At year-end:
Total assets¥

1,366,166¥

1,337,245¥

1,365,430¥

1,357,732¥

1,342,329

287,099

278,473

272,931

275,347

Shareholders’ equity ratio

20.6%

20.4%

19.6%

20.0%

20.6%

Cash and cash equivalents

396,958

388,444

401,136

343,583

354,236

Net assets

281,982

Total number of stores in Japan

14,631

14,656

14,476

14,444

14,659Number of employees (full-time)

10,64810,362

10,385

10,572

10,395Per share data:
Profit (yen/U.S. dollars*1)¥

Annual dividends (yen/U.S. dollars*1)
Payout ratio

246

¥

178

¥

86

¥

200

¥

255

150

150

150

150

255

60.8%

83.9%

172.7%

74.6%

99.7%

Financial data:
Return on equity (ROE)

8.9%

6.6%

3.2%

7.3%

9.3%

Return on assets (ROA)

1.8%

1.3%

0.6%

1.5%

2.3%

Net sales of all stores (Domestic convenience store business):
Net sales by store format*3*4
Franchise stores¥

Directly managed stores

2,272,571¥

2,182,725¥

2,132,618¥

2,296,838¥

2,233,739

26,94729,25633,20048,162

51,5691,202,619

Net sales by product category*3*4
1,229,474

1,190,886

1,156,760

1,237,391

Fast foods

517,272

480,260

462,497546,542

544,530

Daily foods

352,081343,668

343,772

351,442

329,545

Processed foods

200,690

Non-food products
Net sales of all stores
Ratio of operating income to net sales of all stores¥

2,299,518
1.5%

197,166¥

2,211,981
1.2%*1. The U.S. dollar amounts represent the Japanese yen exchange rate against the US dollar as of February 28, 2023 ($1 = 136.33 yen).
*2. These figures include 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.

202,788¥

2,165,818
1.2%

209,624¥

2,345,000
1.9%

208,612¥2,285,308
2.0%

58

Finance / Company Information

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance(Unit: Millions of yen)

2017

¥

¥

¥

¥

¥

2016

289,232¥2015

275,312¥2014

261,681¥2013

247,681¥(Unit: Thousands of U.S. dollars*1)

2012

242,078¥

Finance / Company Information

2022

230,002$

1,845,258

264,734

254,169

227,606

174,044

168,159

192,942

103,357

101,806

94,16576,18875,00964,5004,436,382
970,029

657,324

631,288583,452

497,913

485,247

487,4457,251,676
403,844

65,82073,772

72,541

70,482

68,126

66,246

26,82836,40031,381

32,68637,96533,182

181,097

113,938

99,864112,205

110,567

81,50385,188

1,291,315(91,209)(76,227)(68,657)(100,434)(47,924)(54,196)(334,673)(61,238)(25,638)(50,201)(3,289)(39,650)(31,979)(909,763)

140,495

119,784

106,747

141,251

84,03277,361645,683

58,601

56,19949,293

41,82647,88843,886622,372

900,256¥

866,577¥

803,212¥764,614¥620,992¥

579,809281,446

285,995

272,997263,797

250,497

230,181

30.6%

31.7%

32.9%

33.5%

39.5%

39.1%

30,12067,692

69,79376,75468,75972,76613,992

13,111

12,395

12,276

11,606

11,13010,028

9,403

8,377

7,606

6,336

6,404

268

¥

363

¥

314

¥

327

¥

380

¥

332

255

250

245

240

220

200

95.1%

68.7%

78.1%

73.4%

57.9%

60.2%

9.7%

13.5%

12.0%

13.0%

16.1%

15.2%

3.0%

4.4%

4.0%

4.7%

6.3%

6.0%

2,069,609¥

1,958,550¥

1,880,395¥

1,827,779¥

1,810,418¥

1,747,915$

10,021,023
2,105,912
2,911,744

$

1.80
1.10

$

16,669,633

91,07584,73679,872

105,019

126,873

156,339

197,660

1,138,966

1,073,044

1,033,448

1,034,355

1,060,455

1,063,120

9,018,367

509,415

481,267

463,431429,212408,672

372,706

3,794,264

314,481294,141

276,885

277,210275,437

271,920

2,582,564

197,821

194,833

186,498

192,020

192,726

196,506

2,160,684
2.4%¥

2,043,287
2.8%¥

1,960,266
2.9%¥

1,932,798
3.2%¥

1,937,292
3.5%¥

1,904,254
3.5%

1,472,090$

16,867,293

59

Finance / Company Information

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Industry Trends and Sales, Store-Related Data
Number of convenience storesIndustry Trends
In 2022 (January–December), the convenience store industry saw strong sales of onigiri rice balls, bento (boxed
meals), fried foods, frozen foods, soft drinks, and other items due to product development and assortment selection
carried out in response to such factors as regular one-stop shopping, the complete lifting of priority measures used
to prevent the spread of COVID-19, and recovery in the flow of people, which accompanied the implementation of thenational travel support program. As a result, total annual industry sales increased 3.7% year-on-year to 12,199.6
billion yen, with net sales at existing stores increasing 3.3% year-on-year. As of the end of December, the total
number of stores was 56,232.**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.

Retail industry market size and convenience store share*1
2021

2020

2019

2018

2017

(Billions of yen)(Calendar year)

2022

2016

2015

2014

2013

2012

Total retail industry
annual sales*2

154,402 150,462 146,457 145,047 144,965 142,514 139,877 140,666 141,219 138,897 137,585

Convenience store
sector annual sales*2

12,19911,76011,642

12,184

11,978

11,745

11,445

10,995

10,423

9,872

9,477

Convenience store sharein the retail industry

7.9%

7.8%

7.9%

8.4%

8.3%

8.2%

8.1%

7.8%

7.3%

7.1%

6.9%

Source: Current Survey of Commerce, Ministry of Economy, Trade and Industry*1 The 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 Annual 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*3(Billions of yen)

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

Lawson

2,545

2,442

2,349

2,506

2,424

2,283

2,157

2,049

1,961

1,945

1,907

Seven-Eleven Japan

5,149

4,953

4,871

5,010

4,899

4,678

4,516

4,291

4,008

3,781

3,508

FamilyMart*4

2,958

2,842

2,764

2,965

2,983

3,016

3,009

2,006

1,860

1,722

1,585

Total of the top
three chains

10,652

10,237

9,984

10,482

10,306

9,977

9,682

8,346

7,829

7,448

7,000

Total market share of
the top three chains

87.3%

87.0%

85.8%

86.0%

86.0%

84.9%

84.6%

75.9%

75.1%

75.4%

73.9%

(Fiscal year)

Source: Data published by each company*3 The 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 in convenience store
sector annual sales on a calendar-year basis.
*4 In September 2016, Circle K Sunkus and FamilyMart merged and, in November 2018, brand integration of approximately 5,000 stores was completed.

(Stores)(Calendar year)

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

Number of convenience stores

56,23256,35256,54256,502

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

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

Non-consolidated operating results(Fiscal year)2022

As a percentage
of allconvenience stores(Millions of yen)

2021

2020

2019

2018

Net sales of all con- 2,299,518
venience stores

100.0% 2,211,981 100.0% 2,165,818 100.0% 2,296,156 100.0% 2,236,125 100.0%

Gross operating
revenue

357,571

15.5%

355,10216.1%

354,825

16.4%

390,81117.0%

385,678

17.2%

338,35414.7%

333,784

15.1%

330,600

15.3%

356,385

15.5%

348,49115.6%

303,165

13.2%

307,91313.9%

304,449

14.1%

311,660

13.6%

302,779

13.5%

10,9970.5%

10,929

0.5%

9,800

0.5%

14,1120.6%

13,363

0.6%

Personnel
expenses

43,723

1.9%

44,1842.0%

44,845

2.1%

46,2612.0%

45,903

2.0%

Rents

182,9198.0%

181,260

8.2%

180,7098.3%

181,194

7.9%

172,574

7.7%

Other SG&A expenses

65,524

2.8%

71,5393.2%

69,094

3.2%

70,091

3.1%

70,939

3.1%

Operating income

35,188

1.5%

25,8701.2%

26,1501.2%

44,725

1.9%

45,711

2.0%

Ordinary income

40,6181.8%

34,278

1.5%

33,7001.6%

45,9622.0%

51,443

2.3%

Profit22,5951.0%

13,4700.6%

15,8940.7%

15,4860.7%

31,002

1.4%

Gross operating
profitSelling, general andadministrative
expenses
Advertising and promotional expenses

60

Finance / Company Information

Management policies for fiscal 2022

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Merchandising and service strategies

During the fiscal year under review, or the fiscal year ended February 28, 2023, we continued to take rigorous

Sales continued to surge in frozen foods, fast-food counter items, and products offered by the Machikado Chubo

prevention measures against the spread of COVID-19 and responded to “new normal” demand by exerting concerted

in-store kitchen service, whose assortments we have been endeavoring to expand with the aim of supporting theGroup-wide efforts. Specifically, under the leadership of our Lawson Group Sweeping Transformation Executive

daily lives of customers with store renovations. In the frozen food range, sales were strong for ingredients and deliCommittee, which was launched in September 2020 to realize “Challenge 2025” formulated for 2025, the 50th

items that fulfill customers’ pantry needs as well as for groundbreaking items such as frozen desserts. In the fast-anniversary of our foundation, we renovated our stores and revamped our product lineups in our domestic conveniencefood counter range, KARAAGE-KUN Fried Chicken in new flavors, their sauce-topped series, and Protein Chicken for

store business in response to changes in the business environment. The whole Lawson Group endeavored to resolve

protein lovers enjoyed robust sales. With regard to products offered by the Machikado Chubo in-store kitchens, we

medium- to long-term issues for sustainable growth, acquire new revenue opportunities, and foster job satisfaction.

saw strong performance for regular items such as the mixed-seafood tempura rice bowl as well as deli items andUpholding a strategic concept of focusing on community-based x individual customer and individual store-focusedbox lunch items in which rice is packed separately, launched after October 2022.

operations, we introduced an area company system in the Hokkaido and Kinki regions ahead of other regions. Under

Furthermore, we strengthened our merchandise assortment of regular products and rolled out sales promotional

the new system, the roles and scope of discretion assigned to the headquarters and areas were reviewed, andmeasures, which resulted in the strong performance of onigiri rice balls and the Korega Bento box lunch series ingreater authority and discretion were delegated to the respective areas so as to expedite decision-making and speed

the rice range and deli items in the daily food range. In addition, new dessert products such as Nama Custard Creamup the hypothesis/verification cycle.

Puffs and Rich Canelé also contributed to sales. MUJI cosmetics and baked sweets, which we are currently in theprocess of expanding introduction, recorded strong sales.
The combined number of stores listed on four food delivery services such as Uber Eats, reached 3,558 in 46

Domestic convenience store business
The state of quasi-emergency declaration was lifted in March 2022. There have been repeated waves of new

prefectures as of the end of February 2023. In addition, Uber Eats delivers over-the-counter (OTC) drugs sold at 91
Lawson stores in 17 prefectures.

COVID-19 cases during the fiscal year under review, but an overall rising trend was seen in the movement of people.
Amid such drastic shifts in the business landscape, Lawson has been proceeding with store renovations
considering the characteristics/situation of each store, helping them expand their merchandise assortment ofStore operations

frozen foods and other daily necessities to adapt to changes in customers’ lifestyles and better address customer

In store operations, we continued to focus on reinforcing adherence to the three essential practices, whichneeds. By the end of fiscal 2022, we had completed the renovation of some 2,985 stores, and the total number ofemphasize (1) serving customers courteously; (2) offering a merchandise assortment focused on basic items withstores renovated since fiscal 2021 reached 7,290. Installation of the Machikado Chubo in-store kitchen service athigh demand; and (3) keeping our stores and communities clean. In our efforts to respond to customer needs andstores also progressed, with 9,191 stores equipped with the service as of the end of fiscal 2022. In addition, we

increase sales, we also focused on expanding our merchandise assortment to respond to changes in customer

implemented a full-scale introduction of MUJI products at Lawson stores in May 2022, with a total of 9,621 stores

lifestyles and values. Furthermore, we kept up our initiatives to increase the profitability of franchise stores, including

including those in the previous fiscal year offering the merchandise as of the end of fiscal 2022.

helping them streamline their store operation and control costs associated with food waste and utility expenses.

In store operations, as we work our way toward 2025, our 50th anniversary year, we launched the Happy Lawson
Project ! in June 2022 with the aim of creating new hubs of refreshment in every community, and promoted measures
to fulfill the three promises of our business policy—“Superior taste,” “Human kindness,” and “Environmental (Machi)
friendliness”—in an effort to operate Lawson stores endorsed by all our customers.
In addition to further strengthening our distinctive products that focus on taste and health, we are also working
to provide heartfelt customer service in our stores. Furthermore, we are continuing with our environmentally friendly
measures such as reducing food loss, plastic usage, and CO2 emissions.
61

Finance / Company Information

Store development
In opening new stores, the Group continued to focus on developing profitable stores.
During the fiscal year under review, the total number of Lawson, NATURAL LAWSON, and LAWSON STORE100
stores opened in Japan stood at 228 stores. Meanwhile, we closed a total of 253. As of the end of February 2023,
the total number of domestic stores was 14,631*.
In an effort to establish convenience store models catered to an aging population and a growing trend toward

Introduction

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Number of stores in the convenience store business in Japan(Fiscal year)(Stores)

2022

2021

2020

2019

2018

14,631

14,656

14,476

14,444

14,659Openings

228

483

373

554

1,067

Closings

253

303

341

769

400

Net increase (decrease)

-25

180

32

-215

667

Total number of storesNote: These figures include stores operated by Lawson Kochi, Inc., Lawson Minamikyushu, Inc., and Lawson Okinawa, Inc.

health consciousness, we are building partnerships with dispensing pharmacy and drug store chains to operate
healthcare-oriented Lawson stores that offer OTC pharmaceuticals and prescription drugs, as well as a wider

Number of convenience stores in Japanassortment of cosmetics and daily necessities than conventional Lawson stores. The number of stores offering non-(Fiscal year)

prescription drugs has reached 298 stores (includes 51 pharmacy Lawson stores equipped with drug-dispensing
pharmacies) as of the end of February 2023. Moreover, the number of stores with nursing care consultation desks
for seniors has reached 20 as of the end of February 2023. Furthermore, we have also been expanding our chain of
in-hospital Lawson stores, which feature strengthened focus on medical, sanitary, and nursing supplies in addition
to merchandise and services offered at standard convenience stores. The number of such stores has reached 345

Net increase(decrease) in the term

2022
Stores

Share

203

1.4%

8

0.1%

Stores2021

2020

StoresShare

Stores

Share

2

201

1.4%

221

1.5%

-2

10

0.1%

18

0.1%
12.3%

Lawson, Inc.
Directly managed stores
LawsonNATURAL LAWSON

as of the end of February 2023. Building on our expertise developed through operation of in-hospital Lawson stores,

Franchise stores

we will continue to support the lives of all people interacting with hospitals.

Type B

1,933

13.2%

-23

1,956

13.3%

1,786

Our NATURAL LAWSON stores, which are popular among customers for supporting their beauty, health, andType G

1,249

8.5%

-28

1,277

8.7%

1,320

9.1%

comfortable lifestyles, offer an exclusive selection of finely picked items of value, including food made with healthy

Type C

9,857

67.4%

40

9,817

67.0%

9,744

67.3%

ingredients and environmentally friendly detergents and cosmetics. Meanwhile, our LAWSON STORE100 stores offer

NATURAL LAWSON

123

0.8%

-3

126

0.9%

125

0.9%

LAWSON STORE 100

661

4.5%

-8

669

4.6%

679

4.7%

14,03495.9%-22

14,056

95.9%

13,89396.0%

daily necessities and safe, reliable, and high-quality fruits and vegetables with a focus on freshness, supporting
customers’ daily dietary lives by helping them plan their meals. The stores are visited by customers of all ages
including children and the elderly, and particularly single people and homemakers. As of the end of February 2023,
we operate 131 NATURAL LAWSON stores and 661 LAWSON STORE100 stores.
*The numbers of store openings and closings and total number of stores in Japan include stores operated by Lawson, Inc. and threeequity-method affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc., and Lawson Okinawa, Inc.

Subtotal
Lawson Kochi, Inc.

5

0.0%

-1

6

0.0%

4

0.0%

Franchise stores

133

0.9%

1

132

0.9%

135

0.9%

Subtotal

138

0.9%

—

138

0.9%

139

1.0%

Directly managed stores

Lawson Minamikyushu, Inc.
2

0.0%

—

2

0.0%

2

0.0%

Franchise stores

198

1.4%

-2

200

1.4%

197

1.4%

Subtotal

200

1.4%

-2

202

1.4%

199

1.4%

Directly managed stores

Lawson Okinawa, Inc.
2

0.0%

-1

3

0.0%

3

0.0%

Franchise stores

257

1.8%

—

257

1.8%

242

1.7%

Subtotal

259

1.8%

-1

260

1.8%

245

1.7%

14,631100.0%-25

14,656100.0%

14,476100.0%

Directly managed stores

Total number of convenience
stores in Japan

62

Finance / Company Information

Introduction

Overview of sales

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

Product categories

Net sales for all Lawson chain stores (consolidated) in fiscal 2022 were 2,545.4 billion yen (up 4.2% year-onyear). This was due to the increased sales of the domestic convenience store business resulting from the various

Details

Category

Rice dishes, noodles, sandwiches, delicatessen items, fast foods, etc.

Fast foods
Daily foods

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

measures undertaken by the Lawson Group Sweeping Transformation Executive Committee, as well as marketing

Processed foods

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

measures like the Happy Lawson Project ! , the inclusion of two new companies within the scope of consolidation

Non-food products

Daily necessities, books, magazines, etc.

in overseas business, and other measures. Domestic sales at existing stores (non-consolidated) in fiscal 2022 sawstrong growth in frozen foods, daily food items, and other products as a result of sales floor expansion undertaken

All chain stores: Gross profit margin by product category (Non-consolidated)*3
2022

2021

2020

2019

2018

Fast foods

40.7%

39.6%

39.2%

38.9%

38.2%

Daily foods

34.9%

34.6%

34.6%

34.3%

34.0%

Processed foods

22.6%

22.7%

23.2%

23.8%

23.9%

Non-food products*4

50.5%

49.9%

49.7%

50.5%

50.3%

Gross profit margin

31.0%

30.7%

31.0%

31.3%

31.2%

(Fiscal year)

as part of the ideal store format project of the Lawson Group Sweeping Transformation Executive Committee, as
well as new menu development and other product innovations. Bento (boxed meals) and counter fast foods also
performed well, with particularly favorable results for bento and other products from the Machikado Chubo instore food preparation service, which grew in popularity, contributing to sales. As a result, existing-store sales indomestic Lawson business increased 3.6% year-on-year. The number of customers increased 0.9% year-on-year,
while average spending per customer increased by 2.7% year-on-year.

Third-party bill settlement service*5
Existing store sales, customer count, and average spending per customer year-on-year*1
2022(Fiscal year)
Net sales at existing
stores (year-on-year)
Average number ofcustomers
Average spending per
customer

2021

2020

2019

2018

2017

103.6%

101.1%

92.7%

100.1%

99.5%

99.9%

100.9%

98.7%

85.8%

98.4%

97.7%

98.7%

102.7%

102.5%

108.0%

101.7%

101.8%

101.3%*1 The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.

Sales by product category (Consolidated, total net sales in Japan)*2(Fiscal year)

2022

2021

Fast foods(share)Daily foods(share)Processed foods(share)Portion for cigarettes (share)
Non-food products (share)
Total

2,193.1 100.0%

2020(Billions of yen)

2019

2018

506.6 23.1%

470.4 22.3%

452.8 22.1%

523.3 24.1%

520.4 24.7%

321.3 14.6%

312.9 14.9%

309.3 15.1%

307.3 14.2%

283.9 13.5%

1,174.6 53.6%

1,135.3 53.9%

1,096.3 53.4%

1,143.6 52.7%

1,107.3 52.6%

627.9 28.6%

601.1 28.6%

559.6 27.3%

559.1 25.8%

532.9 25.3%

190.4

186.7

192.1

195.7

194.2

8.7%

8.9%

2,105.4 100.0%

9.4%

2,050.6 100.0%*2 The total of Lawson and NATURAL LAWSON operated by Lawson, Inc.

9.0%

2,170.0 100.0%

9.2%

2022

2021

2020

2019

2018

Bill settlements (billions of yen)

2,579

2,442

2,465

2,498

2,412

Number of transactions (million)

205.0

204.6

211.2

214.6

215.2

(Fiscal year)*3 The total of Lawson and NATURAL LAWSON operated by Lawson, Inc.
*4 Gross profit margin of non-food products is calculated including commission income.
*5 The total of Lawson, NATURAL LAWSON and LAWSON STORE 100 operated by Lawson, Inc.

Overview of Lawson’s main contracts (FC-Cn contracts)
Contract period

10 years from day of store opening

Franchise store owner requirements

Be at least 20 years old and have two full-time store employees

Land, building, and operations fixtures

Supplied by headquarters

Store construction and interior fitting

Borne by headquarters

Required start-up capital

3.1 million yen (including tax)

Amounts charged by headquarters

Amounts obtained by multiplying the monthly gross profit by the following percentages• Portion of monthly gross profit up to 3 million yen: 45%• Portion of monthly gross profit exceeding 3 million yen up to 4.5 million yen: 70%• Portion of monthly gross profit exceeding 4.5 million yen: 60%

Partial assumption of mark-down/
disposal costs

2,105.9 100.0%
Partial assumption of lighting/heating costs

Headquarters assumes the cost equivalent to the total amount multiplied by the predetermined assumption rate within the following percentage ranges for product sales• Portion exceeding 2.0% up to 3.0%: 20%• Portion exceeding 3.0% up to 4.0%: 30%• Portion exceeding 4.0%: 55%
Headquarters assumes 50% of lighting/heating costs
Note: The amount assumed by headquarters in a given month shall not exceed 250,000 yen.

63

Corporate Information

Introduction

Corporate Data As of February 28, 2023
Company name

Lawson, Inc.

Headquarters

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

Established

April 15, 1975

Capital stock

58,506.644 million yen

Number of employees

10,648 (consolidated)

Strategy

Franchise chain development of Lawson, NATURAL LAWSON,LAWSON STORE 100, etc.

Category

Domestic convenience
store business

Number of stores*

20,966 stores

Operating areas

All 47 prefectures in Japan, China (Shanghai and surrounding area,
Chongqing and surrounding area, Shenyang, Dalian, Beijing andsurrounding area, Shenzhen, Xiamen, Wuhan, Hefei, Changsha,
Haikou, etc.), Thailand, Indonesia, Philippines, Hawaii

2409,300,000

Shares issued

100,300,000

Shareholders

30,409Stockexchange listings

Tokyo Stock Exchange(Prime Market)

Stocktransfer agent

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku,
Tokyo, Japan

Shareholder nameDistribution of shareholders by type
Other domestic entities Individuals, others

Securities companies

5.6%

8.4%

Foreign entities

16.5%

Treasury stock

0.2%

50,15050.1

2 The Master Trust Bank of Japan, Ltd. (Trust account)

8,074

8.1

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

2,596

2.6

4 KDDI Corporation

2,110

2.1

5 NTT DOCOMO, INC.

2,092

2.1

6 SMBC Nikko Securities Inc.

1,958

2.0

7 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

1,636

1.6

8 Japan Securities Finance Co., Ltd.

1,180

1.2

9 JP MORGAN CHASE BANK 385771

1,084

1.1

10 Employee stockholding association

929

0.9

*The above percentages of total shares held were calculated after excluding 222,962
treasury stocks.

Consolidation status

Consolidated subsidiary

Lawson Urban Works, Inc.

Consolidated subsidiary

Lawson Okinawa, Inc.

Equity-method affiliate

Lawson Minamikyushu, Inc.

Equity-method affiliate

Lawson Kochi, Inc.

Equity-method affiliate

Seijo Ishii business

SEIJO ISHII CO., LTD.

Consolidated subsidiaryEntertainmentrelated business

Lawson Entertainment, Inc.
United Cinemas Co., Ltd.

Consolidated subsidiary(Consolidated subsidiary of
Lawson Entertainment, Inc.)

Financial
Services Business

Lawson Bank, Inc.

Consolidated subsidiary

Overseas business

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.)

Chengdu Lawson, Inc.

(Consolidated subsidiary of
Lawson (China) Holdings, Inc.)

Saha Lawson Co., Ltd.

Consolidated subsidiary

Lawson Philippines, Inc.

Consolidated subsidiary

Best Practice, Inc.

Consolidated subsidiary

Number of shares held Percentages of total(Thousands)
shares held*

1 Mitsubishi Corporation

Name of company

Lawson, Inc.
Consolidated subsidiary

Major shareholders (Top 10)

Authorized shares

55.0%

Finance / Company Information

SCI, Inc.

Share Information As of February 28, 2023

14.4%

Corporate GovernanceLawson Store 100, Inc.

Net sales for all stores*1 2,545.4 billion yen (consolidated)*1 Net sales for all stores (consolidated) is the sum of total sales in domestic convenience store business, overseas business, and Seijo Ishii stores (consolidated subsidiaries
only). For Seijo Ishii business, only the total for its company-operated stores is included.
*2 Among 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 numberof overseas stores represents the total number of Lawson brand stores managed by operating companies in the respective regions.

Financial institutions

Sustainability

Main Lawson Group Companies As of February 28, 2023
Business activities

President and CEO,
Representative Director,
Chairman of the Board

Value Creation

Consulting businessTotal shareholder return (TSR)
February
2019(%)

February
2020

February2021

February2022

February2023

Lawson

100.2

87.8

79.1

78.8

88.9

TOPIX total return

92.9

89.5

113.2

117.0

127.0

64

Editorial Policy

Introduction

Publication of the Integrated Report 2023

Value Creation

Strategy

Sustainability

Corporate Governance

Finance / Company Information

External recognition As of May 31, 2023

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.”
The Lawson Group Sweeping Transformation Executive Committee is promoting various measures for each projectto achieve the goals of the Lawson Group Challenge 2025, marking Lawson’s 50th anniversary in 2025. The wholeGroup remains committed to solving medium- to long-term social issues to help generate sustainable growth, secure
new earnings opportunities, and enhance job satisfaction.
In editing this report, our goal has been to create a communication tool that will help all stakeholders to gain a

*1

*2

*2

deeper understanding of Lawson’s initiatives to transform its business to address changes in the community, andin the lifestyles of the people living in it, to pursue long-term value creation with reference to the International
Integrated Report Council’s (IIRC) International Integrated Reporting Framework.

*3

Looking ahead, we will continue striving to enhance our disclosures and increase transparency in order to conduct
constructive dialogue with our stakeholders.

*3

Masayuki Itonaga, Member of the Board, Executive Managing Officer, Chief Financial Officer*3

Range of the report
Although portions of this report were produced in cooperation 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.
Reporting period
The primary focus is on targets for fiscal 2022 (March 1, 2022 – February 28, 2023), but earlier and later
activities are also discussed.
See the Lawson website 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 future forecasts
based on its plans and perspectives at the time 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*4*1 Visit the URL below to find out more about the FTSE4Good Index Series.
https://www.ftserussell.com/products/indices/ftse4good*2 Visit the URL below to find out more about the FTSE Blossom Japan Index Series.
https://www.ftserussell.com/products/indices/blossom-japan*3 THE USE BY LAWSON OFANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT,RECOMMENDATION, OR PROMOTION OF LAWSON BY MSCI. MSCI SERVICES AND DATA ARE THE PROPERTY OF MSCI OR
ITS INFORMATION PROVIDERS, AND ARE PROVIDED ‘AS-IS’ AND WITHOUT WARRANTY. MSCI NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI.
*4 Lawson Inc. is a DX-Certified Operator under the Digital Transformation (DX) Certification system provided by the Ministry of Economy,
Trade and Industry on August 1, 2021, and this certification was renewed on August 1, 2023.

For more information about external recognition
https://www.lawson.jp/en/ir/library/external_recognition.html

due to various circumstances and external environmental factors.
65