Japan's Major Convenience Store Operators Report Mixed Profit Results for March-November Period

Overview of Financial Performance

Japan's major convenience store operators have presented a varied financial landscape for the March-November 2024 period. While Lawson and FamilyMart announced notable increases in their net profits, Seven & i Holdings, the parent company of industry leader Seven-Eleven Japan, reported a significant decrease in its bottom line for the same period. This mixed performance reflects diverse operational strategies and market challenges faced by the retail giants.

Lawson Achieves Record Profit Growth

Lawson recorded a strong financial performance, posting a record third-quarter net profit of ¥52.4 billion. This represents a substantial increase of 14.4% compared to the previous year. The growth was primarily fueled by robust sales of its popular 'Karaage-kun' fried chicken and other private-brand products. Additionally, a successful sales campaign conducted in collaboration with telecommunications carrier KDDI, which holds a 50% stake in Lawson, contributed to the positive results.

FamilyMart's Profit Surges Amid Strategic Realignment

FamilyMart also reported a significant boost in its net profit, which climbed by 62.4% to ¥80 billion for the March-November 2024 period. This impressive growth was largely attributed to a special profit derived from a strategic realignment of its Chinese operations. Despite a slight dip in operating revenue due to a reduction in the number of directly operated stores, the company's overall profitability saw a substantial improvement.

Seven & i Holdings Faces Overseas Challenges

In contrast to its competitors, Seven & i Holdings experienced a sharp decline in group net profit, which tumbled by 65.1% to ¥63.6 billion. The company attributed this downturn primarily to its struggling U.S. business and a perceived slowness in adapting to the evolving demands of budget-minded convenience store customers. However, the company noted that its domestic performance is showing signs of recovery, bolstered by an expanded offering of low-priced items to meet consumer needs.

Broader Market Trends and Future Outlook

The overall Japanese convenience store market has shown resilience, with total sales reaching a record high in 2024, marking the fourth consecutive year of growth. This expansion has been driven by factors such as the removal of COVID-19 restrictions, a surge in inbound tourism, and an unusually hot summer. Operators are actively engaging in strategies to attract customers, including expanding low-priced product lines and offering discount coupons. Companies like Seven-Eleven Japan are also focusing on boosting sales of counter items, such as fried food, to enhance their domestic performance.