In Domestic convenience store operations, revenues from operations amounted to ¥671,602 million (101.5% year on year), and operating income amounted to ¥185,345 million (104.6% year on year).
The impact of COVID-19 has caused commercial areas to shrink in size and highlighted growing differences in customer needs among individual stores. In this environment, SEVEN-ELEVEN JAPAN CO., LTD. continued to implement activities that integrate three initiatives, specifically expanding its assortment of high-value-added merchandise, changing store layouts as part of efforts to increase the number of items carried and conducting sales promotions that produce an event-like sense of excitement. The goal of these initiatives is to increase the number of customers visiting 7-Eleven stores to find the merchandise they seek. To address growing demand for delivery services, SEVEN-ELEVEN JAPAN CO., LTD. has been strengthening its initiative “7NOW,” a service that allows customers to order items via smartphone for delivery to a designated location in as little as 30 minutes. We will continue to open the next door of convenience by constantly providing new experiences and values, from the customer’s point of view, and continue working to realize sustainable growth throughout the value chain, including franchisees and business partners.
For the nine months ended November 30, 2022, we benefited from factors including an increase in the number of stores carrying new fast food and DAISO merchandise to broaden the customer base and from the success of proactive sales promotion initiatives such as various fair events, as well as a recovery in customer traffic and favorable weather. As a result, existing store sales increased year on year. Operating income increased to ¥185,649 million (104.8% year on year), despite a continued increase in utilities costs resulting from much higher fuel cost adjustment rates. Moreover, total store sales (the sum of sales from directly operated stores and franchisees) amounted to ¥3,883,460 million (103.8% year on year).

In Overseas convenience store operations, revenues from operations amounted to ¥6,628,271 million (188.3% year on year), and operating income amounted to ¥227,539 million (182.3% year on year).
In North America, 7-Eleven, Inc. strove for stable store management even as certain problems emerged, such as labor shortages and supply constraints caused by logistics disruptions in the U.S. market. It continued to implement measures such as expanding its assortment of exclusive merchandise including high quality and highly profitable fresh food and proprietary beverages, and stepping up efforts focused on the “7NOW” delivery service, which is available at approximately 5,000 stores.
For the nine months ended November 30, 2022, despite signs of consumer spending restraint due to surging prices, merchandise sales at existing stores in the U.S. increased year on year in U.S. dollars. In yen terms, operating income amounted to ¥305,765 million (182.9% year on year). Moreover, total store sales (the sum of sales from directly operated stores and franchisees) amounted to ¥7,796,587 million (174.7% year on year). In addition, the Cost Leadership Committee has been established and the cost structure is being drastically revised. Efforts will be made to improve profitability even further by implementing measures such as developing appropriate decision-making frameworks and changing attitudes toward cost control.
Currently, the integration process with the Speedway business acquired in May 2021 is proceeding smoothly and moving at a pace that will greatly outperform the synergies amounting to U.S.$450 million expected to be generated in the fiscal year ending December 31, 2022.
Moreover, 7-Eleven International LLC, which was established through a joint investment by SEVEN-ELEVEN JAPAN CO., LTD. and 7-Eleven, Inc., will strengthen the co-creation of value through collaboration between the 7-Eleven businesses in Japan and the U.S. under the company’s direction, with a view to accelerate its global strategy. By the fiscal year ending December 31, 2025, 7-Eleven International LLC plans to establish a store network of 50,000 stores in areas outside Japan and North America. By the fiscal year ending December 31, 2030, it plans to open stores in 30 countries and regions worldwide, including Japan and North America. With these plans in mind, 7-Eleven International LLC is now formulating a more finely tuned strategic roadmap.

In Superstore operations, revenues from operations amounted to ¥1,064,876 million (79.6% year on year), and operating income amounted to ¥1,295 million (12.8% year on year).
Ito-Yokado Co., Ltd., an operator of general merchandise stores, will continue to promote its regrowth strategy to achieve, including further differentiation and monetization. This will be accomplished by completing business structural reforms by the end of the fiscal year ending February 28, 2023, transforming Ito-Yokado's Net Supermarket (online supermarkets) service into large-scale centers, concentrating on the metropolitan area and other major cities, and converting food to an SPA (Specialty Retailer of Private Label Apparel)-like business model with vertically integrated operations from planning to production and sales.
For the nine months ended November 30, 2022, existing store sales (including tenants) rose year on year mainly due to a recovery in customer traffic, and the rebound from the previous year’s shortened opening hours and limited number of visitors. However, operating loss amounted to ¥5,617 million (in contrast to an operating loss of ¥2,465 million for the same period of the previous year) mainly due to deterioration in the food gross profit margin and an increase in utilities costs and other expenses due to much higher fuel cost adjustment rates.
In addition, existing store sales at York-Benimaru Co., Ltd., a food supermarket operator, declined year on year, primarily due to a downturn in food sales, which had been firm since the start of the COVID-19 pandemic. However, the merchandise gross profit margin improved mainly owing to the effects of its merger on March 1, 2022 with Life Foods Co., Ltd., which had been making and selling side dishes at York-Benimaru stores. York-Benimaru’s operating income amounted to ¥11,999 million (112.7% year on year). York-Benimaru will continue enhancing its high-growth integrated delicatessen production and sales business model, and to target sustainable growth as a supermarket operator that proposes lifestyle solutions.
The Group companies in Superstore operations, centered on Ito-Yokado Co., Ltd., have expansive procurement capabilities spanning fresh food, processed food and other items, a wide range of knowledge, information gathering capacity and relationships of trust with suppliers that have been fostered over many years. Meanwhile, SEVEN-ELEVEN JAPAN CO., LTD. possesses a merchandise development process created independently and dominant sales capabilities. By integrating these strengths, we will continue to expand sales from competitive private brands and implement last mile initiatives, and thereby promote our Group food strategy.

In Department and specialty store operations, revenues from operations amounted to ¥337,369 million (66.1% year on year), and operating loss amounted to ¥794 million. (in contrast to an operating loss of ¥10,217 million for the same period of the previous year).
In Department store operations, existing store sales increased year on year, primarily due to a recovery in mainstay apparel sales and solid sales of luxury brands. However, this was unable to offset the increase in selling, general and administrative expenses such as utilities costs, resulting in an operating loss. In restaurant operations, performance was not profitable despite an improving trend due to a rebound from shortened operating hours and restrictions on the serving of alcoholic beverages, along with a recovery in demand for eating out.
In addition, based on the approach to the business portfolio, we have entered into an agreement to transfer all shares outstanding of Sogo & Seibu Co., Ltd. held by the Company to Sugi Godo Kaisha, a special purpose company which is a related entity of Fortress Investment Group LLC, and are holding discussions to execute the agreement.

In Financial services, revenues from operations amounted to ¥145,700 million (99.8% year on year), and operating income amounted to ¥29,952 million (98.9% year on year).
As of November 30, 2022, the number of domestic ATMs operated by Seven Bank, Ltd. stood at 26,660, up 466 from the previous fiscal year-end. The average number of transactions per day per ATM amounted to 100.4 (up 4.1 year on year), owing to continued growth in the number of cash charge transactions at ATMs as consumers opted for various cashless payments, as well as improvement in the number of transactions at deposit-taking financial institutions. As a result, total transactions of Seven Bank’s ATMs during the nine months ended November 30, 2022 increased year on year. As of November 30, 2022, Seven Bank had cash and deposits (including cash for ATM loading) of ¥895.5 billion.
Under the Group financial strategy, we seek to develop distinctive financial services based on 7iD, an ID that customers can use across the Group, and to provide new experiences and values that span retailing and finance. Currently, the Financial Business Strategy Office is taking the lead in considering specific strategies.