Profitability, Cost and Business Structure Reform through Collaboration with the AEON Group

「To strengthen and improve the efficiency of headquarters functions, the company worked on recruiting and training specialized personnel, strengthening marketing functions, reviewing headquarters operations to reduce workloads, and deciding on specific measures and preparing a roadmap.」

「At the same time, to reduce and improve the efficiency of head-office operations through digital initiatives being pursued as a project, we will implement measures based on the inventory of head-office operations and the roadmap prepared in the first half, and work to optimize expenses.」

「As part of structural reform, we have been transforming the merchandising process and management guidance based on measures addressing human resources, while working to create sales floors supported by customers and improve store profitability.」

「Under our growth strategy, we restrained growth investment in areas such as opening new stores and revitalizing existing stores, selectively pursued initiatives, and focused on structural reform. We changed our thinking from one premised on franchise agreements and advanced reforms to establish a corporate culture that prioritizes business profits retained by the company.」

「By advancing investment in the New Combo Store model and new businesses during the current fiscal year, we established the foundation for integrating the MiniStop store business with new businesses centered on digital operations in the next fiscal year.」

「The number of MiniStop partnership-contract stores that changed from the conventional royalty model to a business-profit-sharing model reached 290 at the end of November 2022.」

「Regarding contracts with franchisees, we began implementing the MINISTOP Partnership Agreement, which changed the system from the conventional royalty-based method to a business-profit-sharing method, in September last year. As of the end of August 2022, 232 stores were under the MINISTOP Partnership Agreement.」

「To continue advancing structural reform, we will implement reforms that extend into the value chain and transform our earnings structure. We will also continue improving labor-hour productivity through IT and building low-cost operations.」

「For franchise agreements, we began implementing the MINISTOP Partnership Agreement, which changed the system from the conventional royalty-based method to a business-profit-sharing method, in September 2021. As of the end of November, 103 stores had adopted the MINISTOP Partnership Agreement.」

「For franchise agreements, we began implementing the “MINISTOP Partnership Agreement,” which changed the system from the conventional royalty-based method to a business-profit-sharing method, in September 2021. Existing franchisees will switch to the partnership agreement when their contracts are renewed, and approximately 140 stores are scheduled to switch this fiscal year.」

「We fundamentally reviewed our franchise agreements as the “MINISTOP Partnership Agreement,” which changed the system from the conventional royalty-based method to a business-profit-sharing method. We are preparing to begin implementation in September 2021, including consolidating franchisees’ views expressed at briefing sessions held nationwide.」

「We will develop a business model under the new franchise model, formalized as the “MINISTOP Partnership Agreement,” in which franchisees and headquarters work and make efforts together, share the business profits generated, and prosper together. We will steadily implement the model toward its launch in autumn 2021 while holding discussions with franchisees.」

「Alongside our response to the new normal, we will further strengthen in the second half the 3 initiatives set out as this year's policy: increasing the top line, or sales; reforming the structure of existing businesses; and developing a new franchise model.」

「For structural reform of existing businesses, we pursued reforms from 3 perspectives: costs, profitability and the business. Cost structure reform involved reviewing the frequency of deliveries to stores and reducing delivery costs. Profit structure reform involved expanding the range of Topvalu products handled and working to expand the supply to the AEON Group of Topvalu products developed by the Company. Business structure reform involved opening 4 stores in total in Tokyo, Kanagawa and Kyoto for the new soft-serve ice cream specialty store business, MINISOF (ミニソフ).」

「To improve operating profit, we will advance structural reforms from the perspectives of costs, profitability and the business. In investment management, we will also reset the allocation of existing and new investments and tighten investment controls.」

「With regard to structural reform, we will strengthen collaboration across the AEON Group, realize Group synergies and advance reforms to the profit structure. Specifically, we will expand the supply of Topvalu products developed by MINISTOP CO.,LTD. and simultaneously expand the range of Topvalu products handled by MINISTOP CO.,LTD. In logistics, we will integrate the distribution centers of Group companies to reduce the cost of processed foods and other products. We will also collaborate on cashless payments, including by strengthening promotions for the electronic money service WAON. With regard to the cost structure reforms being pursued by MINISTOP CO.,LTD., we will promote RPA and outsourcing of routine tasks and reduce costs, primarily in indirect functions. For business structure reform, we will prepare to establish a new franchise model. We plan to accelerate these reforms to the profit, cost and business structures and rebuild our business model.」