Takeshi Niinami President and Chief Executive Officer

Operating in an Age When We Cannot Be Complacent in Past Successes
Japan is currently confronting a host of unprecedented circumstances that include a declining population amid falling birthrates and the aging of society, widening disparities between urban and regional areas, soaring prices for crude oil and other raw materials, heightened concern over food safety and a rising awareness of the threats posed by environmental problems. Several of these factors are dampening consumer sentiment, and the operating environment surrounding convenience stores as well as Japan’s entire retail industry is likely to become increasingly harsh.
      Viewing the current situation as an opportune time for action, in April 2008 we launched the LAWSON Genki ^*1 Plan aimed at being “The ‘Hot’ Station in the Neighborhood^*2” that invigorates and energizes residents of local communities. Under this plan, we strive to operate vibrant and clean LAWSON stores that have bright and spirited employees and where customers can easily obtain desired products and information. To realize this objective, we will first focus on invigorating our franchise owners, store crews^*3 and employees by making future-oriented investments for developing products that offer high value and that are cost competitive even in times of sharp rises in materials costs. Our investments will also be targeted at creating motivating work environments for store crews and for developing human assets, beginning with supervisors who provide instructions and other assistance to franchise owners to support store management.

Creating Vibrant Stores Tailored to Local Communities
Determined to create vibrant stores tailored to the needs of customers in each neighborhood we serve, we are promoting store management based on the principle of “individual store orientation” and developing products especially suited to each neighborhood, with initiatives centered on our seven nationwide regional branches. As part of these efforts, we have been strengthening employee education to ensure proper decision-making that is ideally compatible with local conditions and the needs of each neighborhood. Accordingly, we have steadily developed human assets who are capable of self-initiative, while accumulating a wealth of know-how on creating stores and products that closely reflect the preferences of the local community. By constantly repeating this process on a trial-and-error basis, we are creating a framework for executing our “individual store orientation” principle.
      LAWSON is presently opening stores with new formats crafted to the specific needs of each neighborhood. These new LAWSON formats include NATURAL LAWSON, which is suited to lifestyles based on the key words of beauty, health and comfort; LAWSON STORE100 value-priced fresh-food convenience stores; and LAWSON PLUS stores that utilize product development capabilities and the know-how gained from operating NATURAL LAWSON and LAWSON STORE 100 stores. Looking ahead, we will also build new business models utilizing our comprehensive business alliance with Japan Post Holdings Co., Ltd., as we aim to build stores that make the people of the neighborhood say, “Thank heavens for LAWSON!”

Realizing a Low-Carbon Society
Recent years have witnessed a host of problematic phenomena in regions worldwide attributed to global warming. To ensure our Earth remains a healthy and hospitable habitat where future generations can live with a sense of safety and reassurance, there has been greater attention on specific actions for reducing emissions of carbon dioxide (CO2) and other greenhouse gases not just by companies but also by individuals and governments.
      Keenly attuned to the critical importance of this issue, LAWSON has established its own autonomous targets for reducing CO2 emissions. For example, by FY2012, LAWSON is striving for a 10% reduction in CO2 emissions based on electricity consumption per store compared with FY2006 levels, which represents an overall CO2 reduction of 60,000 tons per year. In working toward this goal, we are striving to reduce electricity usage at LAWSON stores by actively introducing energy-saving equipment such as chilling and refrigeration units as well as air conditioning and lighting systems.
      We are also addressing environmental issues on other fronts as well, including the use of plastic shopping bags at check-out counters, the use of disposable chopsticks, disposing of unsold food such as boxed lunches and store operating hours. In working to realize a low-carbon society, we will re-evaluate our entire business operations as we think independently about customer needs of in each community, earnestly address various important issues and create a framework that promotes the conservation of energy and precious resources.
      As a convenience store chain with close ties to customers in local communities, we are also striving to reduce CO2 emissions by working hand-in-hand with our customers. To this end, LAWSON proposes a variety of environmental protection activities in which customers are able to participate in their daily lives. Prime examples of such activities include our ecology-focused “Bring Your Own” campaign that encourages shoppers to bring their own reusable shopping bags and chopsticks; the “CO2 Offset Campaign,” which offers a service enabling customers to autonomously offset CO2 emissions; and the LAWSON Green Fund, which supports tree-planting activities in Japan and abroad. LAWSON is confident in being able to achieve meaningful results by undertaking each one of these activities in collaboration with the approximately 8 million customers frequenting LAWSON stores every day, franchise owners and store crews.

Employing People from Different Cultures and Building a Flexible Organization
Today, business methods are undergoing significant changes and companies are shouldering increasingly heavy social responsibilities. Guided by our corporate philosophy of “Happiness and Harmony in Our Community,” we recently formulated the new LAWSON Group Corporate Conduct Charter, under which we will strive to maintain and raise the awareness of strict adherence to corporate ethics among all members of the LAWSON family^*4. In tandem, we are proactively establishing a risk management structure and an internal control system.
      To create an organization that can respond flexibly to an ever-evolving society, LAWSON hired 10 non-Japanese staff members as new employees in FY2008. By bringing different cultures into the LAWSON Group, we are striving to change the mindset of our employees and imbue them with a sense of internationalism. We believe that LAWSON’s corporate characteristics are conducive to embracing such new challenges. Backed by a business organization with diversity and flexibility, we will emphasize innovation in finding solutions for every issue we face as we spread a spirit of vibrancy throughout society.

^*4 LAWSON family includes all employees, franchise owners and store crews.