Lawson Targets U.S. Drug Stores as It Seeks Health Expertise

Lawson Inc. (2651), the second-biggest convenience store chain in Japan, is looking to buy or invest in drug stores in the U.S. and Europe, using their expertise to expand its domestic health-care business.

The retailer plans to open one-stop shops catering for an increasing number of health-conscious consumers who eat nutritious food and take supplements and drugs, Chief Executive Officer Takeshi Niinami said in an interview yesterday. It hopes investments in foreign drug stores would help it adopt their expertise in its local business, he said.

Lawson, which bought about 5 percent of pharmacy operator Qol Co. (3034) last year, is strengthening its health-related business to differentiate itself from competitors. The chain’s profit has grown 50 percent over the past five years, compared with 5.7 percent for larger rival Seven & I Holdings Co. (3382), owner of the 7-Eleven brand, according to data compiled by Bloomberg.

“We see more business opportunity if we can absorb the know-how of U.S. or European drug stores and put it into practice in Japan and China,” which face increasingly aging populations, Niinami said.

Tokyo-based Lawson plans to expand sales of drugs and its offerings of low-carbohydrate, low-calorie food for health-conscious customers such as diabetics among other healthy options, Niinami said.

Photographer: Tomohiro Ohsumi/Bloomberg

A pedestrian walks past a Lawson Inc. convenience store in Tokyo. Lawson operated 11,249 outlets in Japan and 461 stores overseas as of May. Close

A pedestrian walks past a Lawson Inc. convenience store in Tokyo. Lawson operated... Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

A pedestrian walks past a Lawson Inc. convenience store in Tokyo. Lawson operated 11,249 outlets in Japan and 461 stores overseas as of May.

The company hasn’t started talks with any acquisition targets and hasn’t decided how much to spend, Niinami said.

Lawson’s shares have gained 37 percent this year, lagging behind the 39 percent climb of the broader Topix index and the 61 percent surge of Seven & I.

Lawson operated 11,249 outlets in Japan and 461 stores overseas as of May. More than 100 were Natural Lawson stores selling health-oriented food such as bento boxes with brown rice and tofu tortillas. About 80 locations also sell drugs.

Seven & I, the world’s largest convenience-store operator, had more than 50,000 outlets worldwide in March, according to its website.

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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