Japan’s second largest convenience-store operator Lawson Inc. on Tuesday said net profit rose 14.9 percent for the first half of fiscal 2014 despite a drop in sales. In the six months from March to August 2014, net profit rose to JPY21.89 billion from JPY19.05 billion in the first half of fiscal 2013. However, net sales dropped 13 percent to JPY76.75b, while gross operating revenue fell 2.5 percent to JPY241.93b. The group attributed the drop to an increase in the number of franchised stores and a decrease in the number of company-operated stores.
Based on its analysis of purchase data retrieved from the multi-partner loyalty program, Ponta, the group focused on customer relationship management (CRM) and supply chain management (SCM) in order to offer a merchandise assortment that meets the specific needs of customers in each neighbourhood.
"The number of Ponta cards issued under our joint points program continued to rise strongly, topping 6.5 million at the end of August 2014.The percentage of Lawson sales purchased by Ponta card members has now reached 50 percent. The customer data collected from Ponta cards, combined with the rich purchasing data collected from over 10,000 stores, enables us to form a clear, swift picture of immediate regional customer needs," the company said in a statement.
The convenience store giant increased the number of stores offering its MACHI café service to 9,368 at the end of August 2014. It believes its MACHI café services are helping to boost the competitiveness of the Lawson chain.
In addition to the expansion of MACHI café, Lawson strengthened its range of pre-prepared fast-food items and other higher value-added products. Gross profit margin rose 0.4 point year on year for the first half of fiscal 2014, thanks to the rise in sales of such high-margin items.
The group installed in-store kitchen facility Machikado Chubo to cook pre-prepared fast-food items and the number of stores equipped with the facility reached 2,666 as of the end of August 2014.
By incorporating the Smart Kitchen regular home delivery service operation into the Lawson Group in July, and rebranding it as Lawson Fresh online home shopping, the group made further improvements to its home convenience services.
Lawson opened 513 new stores and closed 214 stores over the six-month period, boosting the total number of Lawson stores in Japan by a net 299 stores – roughly in line with its initial plan.