Message from the President

　The post-COVID era is in full swing. People’s activities have regained their previous vigor, and consumption has surged with the revival of various local festivals and events combined with a rise in inbound demand. On the other hand, high prices against the backdrop of rapid inflation since last year driven by rising geopolitical risks and a historically weak yen are having a significant effect on the daily lives of consumers in local communities. Looking at the consumption trends of customers, we can see a growing tendency for “polarized consumption with localized spikes,” where consumers are trying their best to minimize expenditures on daily necessities while also splurging on travel and dining to express a sense of post-pandemic freedom. Moreover, sharp increases in the price of costs tend to hit those with lower disposable incomes the hardest, exacerbating the “polarization of wealth” in the structure of society. Under the complex environment represented by these two polarizations, we recognize the need to provide customers with the products and services that will satisfy them.

　We are committed to achieving sustainable management through the implementation of the "Five Reforms." These reforms embody the group's shared strategies, emphasizing "Digital," "Products," "Health and Wellness," "Regional," and "Asia," alongside "Environment and Green." This approach is aligned with our Medium-term Management Plan (FY2021-FY2025).

　In recent years, private brands (PBs) have gained support from customers not as substitutes for national brands (NBs) but as brands that offer new value in their own right. In addition, increasingly diverse purchase channels that include physical stores and online have made the unique value of these products themselves a competitive advantage for companies. With PBs occupying a higher position in retail businesses, we see significant opportunities in this area for “TOPVALU,” our own PB. By focusing on products with unique value that give shape to new ideas and excitement based on the concepts of each of the three sub-brands, we are able to appeal to new customer segments including younger demographics. Additionally, by leveraging the group’s economies of scale and engineering cost reductions into every stage of the supply chain, PBs are an important means to secure profits with double-digit sales growth year after year.

　In terms of the “acceleration and evolution of the digital shift,” we have started to see steady results in two areas, “the expansion of digital business” and “improved productivity through the digitalization of physical stores.”
　As to the “expansion of digital business,” net sales from our online supermarket business entered the 80-billion-yen range, among the highest levels in Japan in fiscal 2022. In addition to our existing online supermarket business that involves shipping from our physical stores, in July this year, we launched the “Green Beans” service, a new online marketplace we have been preparing since 2019 to provide service to the Tokyo metropolitan area, where there are comparatively fewer AEON stores. Customers can set delivery times in one-hour increments from 7:00 a.m. to 11:00 p.m. and select from a range of up to 50,000 items including high-quality fresh products that are strictly temperature-controlled and bulk items our customer fulfillment centers are uniquely capable of shipping. The “Green Beans” service caters to customers who have limited opportunities to visit physical stores and a strong need to shorten the time they spend shopping, such as working couples and families raising children.
　Among efforts for “improved productivity through the digitalization of physical stores,” we have introduced self-checkout systems such as “Regi-Go” and “Scan & Go” that allow customers to handle everything up to final payment themselves, and streamlined operations with the use of AI. This utilization of digital tools has driven improvements in person-hour productivity. We will continue to actively pursue these digital investments that have shown steady results with greater speed. At the same time, we will not only work to reduce person-hours through improved efficiency, but also step up employee reskilling efforts with the aim of elevating the quality of each and every employee.

　In the court of tackling these environmental and social issues such as climate change, resource depletion, and the loss of biodiversity, we focus on green transformation(GX). AEON’s environmental conservation activities date back to 1991 when we launched a tree planting effort known as the “AEON Hometown Forests Program.” In the years since we have pursued a wide range of activities across the AEON Group together with local communities, including the Bring Your Own Shopping Bag Campaign, the in-store collection of recyclables, and efforts to reduce spoilage-related food loss. While we will continue to develop these activities in a sustainable way, we also believe it is important not to limit our perspectives to conventional environmental and social contribution, and to instead incorporate GX perspectives into the diverse businesses of the group and link those efforts to business growth.

　In the area of products, we have enhanced the rollout and sale of TOPVALU products using　recycled plastics for containers and packaging, which are later collected in-store, recycled again, and purchased, creating a positive cycle. Since AEON operates over 16,000 stores in Japan alone, we believe we can function as a hub for resource recycling and implement it as a business engaged in collection, recycling, and sale.
　In terms of facilities, in anticipation of a future electric vehicle (EV) based society, the installation of quick charging equipment will improve the convenience of visiting our stores. In conjunction with these efforts, we are implementing various initiatives to shape a decarbonized society, including the development of systems for flexible local renewable energy through the purchase of surplus household power through EVs. In addition, by actively installing solar power generation equipment on AEON Mall Co., Ltd. rooftops and parking facilities, we will switch to 100% renewable energy for the power used at all AEON Mall locations in Japan by 2025.
　We believe that tackling green activities together with various stakeholders, especially “customers in the local community,” is both a feature and an important perspective of AEON’s approach. “By having customers realize that using AEON stores, products, and services will lead to action that takes nature and the environment into consideration,” we aim to lead GX across society as a whole where “AEON is seen as synonymous with the environment first and foremost.”

　The AEON Foundational Ideals have been established as “pursuing peace, respecting humans, and contributing to local communities, always with customers as our starting point.” To ensure these ideals will be properly understood and passed on in the future by the roughly 570,000 members of the AEON Group in Japan and overseas, we have formulated and shared a narrative. This is also designed to ensure that even if an individual employee is unsure of how to proceed as they sincerely engage in their work, they can fall back on our corporate philosophy as the basis for their own decisions. Our aim is for employees of different nationalities, languages, and values to come together while sharing common aims and values based on the Foundational Ideals. From a desire to express AEON’s intent to uphold the approaches and stances described in the Foundational Ideals, and to actively communicate them and promote their understanding among stakeholders, the narrative of the AEON Foundational Ideals has also been incorporated into our Articles of Incorporation.
　More than two decades have passed since we changed our name to “AEON” with the declaration to “transform into a company of the 21st century.” Reexamining the meaning of “a future with dreams” that we established as our vision at that time, in October 2022 we formulated our Vision Statement, to “create a future lifestyle that leads to a smile for each and every person,” and also drafted the AEON Group Future Vision. With the aim of reconsidering our reason for existing as a corporation able to create prosperous lifestyles for people even in the distant future of our rapidly changing world, the Vision Statement and Future Vision were created through discussions and proposals involving junior employees. To respect the diversity of each individual and turn it into the strength of the group, we will strive to develop a corporate culture in which junior employees can channel their entrepreneurial spirit to submit new proposals.

　The AEON Foundational Ideals state that “to ensure our longevity as a corporate group, we will continue to innovate, always with the customer as our starting point.” Continuing to innovate doesn’t mean that we will simply continue with improvement activities. We believe that “innovation” means that even if business is currently going well, we must not settle for the status quo, and instead adopt a forward-looking view to customer trends and make the next new moves faster than anyone else.

　In the hope that customers will think “I’m glad AEON is around,” we will continue to tackle innovation and take on challenges to ensure that “AEON’s growth leads to the prosperity of the community.”