Top Management Message

Performance report for the first three quarters (March to November 2011)

   Following the economic downturn in the aftermath of the Great East Japan Earthquake, the economy rebounded moderately in the third quarter. However, recent economic performance is still stagnant as a result of the unprecedented appreciation of the yen and the overseas deflationary spiral brought on by the European debt crisis.

   After the earthquake disaster, the value of convenience stores as an infrastructure that supports community life has increased further. Amid declining birthrates and an aging population, the need for convenience stores and the incentive to buy from them are greater than ever before, as the number of elderly couples living alone, single-person households, and working women has grown. The recent earthquake disaster has made people all the more conscious of this fact.

   Against this backdrop, FamilyMart, together with its franchisees, has made every possible effort to fulfill the roles and functions customers expect of convenience stores. FamilyMart has thoroughly committed to SQ&C (service, quality and cleanliness), the basics of the retail business, opened stores in temporary housing complexes and launched Famimago mobile sales vehicles in earthquake-stricken areas. In addition, we have worked to get customers in communities to feel “Close Ties” by expanding our sphere of Famimago activity to include so-called “areas where it is inconvenient to shop,” which is considered a recent social phenomenon.

   Turning to products, we have been developing original items centering on our core ready-to-eat lines. As a new priority category, in September, we launched “IRODORI famima DELI,” our very own brand of delicatessen items and salads. By choosing Nadeshiko Japan - the national women’s soccer team - as the face of our advertising campaign, and producing a rich selection of delicious and fresh-looking food, we have won the support of a wide range of customers including working women.

   As to store development, we have continued with the construction of a high-quality store network. The conversion of the am/pm brand was completed in the Tokyo metropolitan and Kansai areas in 2011, with all 733 stores being converted to the FamilyMart brand over a two-year period.

   Overseas operations, especially in Taiwan, Thailand and South Korea, have contributed an increasing share of earnings to the business, and we have aggressively opened new stores in China. In each region, we have taken steps to increase our gross profit ratio by maintaining, just as in Japan, our thorough commitment to SQ&C and by offering product selections that meet the preferences of customers in each locality.

   As a result, at the end of the third quarter, the number of stores in the FamilyMart chain in Japan came to 8,697, including the four domestic area franchisers. Further, the total number of overseas area franchisers in Taiwan, South Korea, Thailand, China, the United States, and Vietnam came to 10,782, for a combined total of 19,479 stores in Japan and overseas.

   During the first three quarters of fiscal 2011, consolidated total operating revenues came to \249,650 million (up 2.5% year on year), operating income was \35,071 million (up 9.4%), and ordinary income amounted to \37,236 million (up 9.8%), all record high figures. In addition, owing to a loss recorded due to the effects of applying the Accounting Standard for Asset Retirement Obligations, and in the aftermath of the Great East Japan Earthquake, net income came to \14,851 million (down 9.4%).

Click here for third quarter financial statements

Initiatives for the fourth quarter and beyond

   We adopted the slogan “Smiling Together” in order to welcome our customers in 2012 with ever more hospitable service so that every store delivers a big smile to each and every one of its customers.

   As for our product strategy, we will continue to develop high-value-added products that are moderately priced and only available at FamilyMart, such as the products developed by our “Otona-conveni Laboratory” and “IRODORI famima DELI,” our very own brand of delicatessen items and salads.

   Furthermore, while we continue to accelerate the opening of new stores, as a further stage in our growth, we will also increase the number of stores overseas. We have already opened stores in seven overseas markets including Japan and are on track to achieve 20,000 store openings globally in fiscal 2012. At FamilyMart, this attainment does not mark the end of the road; rather, we view it as a new phase as we set our sights on reaching 25,000 stores globally in fiscal 2015 and 40,000 stores in fiscal 2020.

   I would like to thank our shareholders and investors for their support over the year.

January 6, 2012
Junji Ueda
President and Chief Executive Officer