The Power of Local Specialties Rich Smoked Cheese-like Flavor Motai Smoked Tofu (Gujo City, Gifu Prefecture) The Motai district prospered as a post to

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1 December 205 Vol. 5 F u l l y G l o b a l, Tr u l y L o c a l SPECIAL FEATURE Enriching Food for Better Urban Life 特集 为了丰富都市的饮食生活 Interview Akira Okada Visiting professor at Osaka University of Economics and economic analyst 专访 冈田 晃 大阪经济大学客座教授 经济评论家

2 The Power of Local Specialties Rich Smoked Cheese-like Flavor Motai Smoked Tofu (Gujo City, Gifu Prefecture) The Motai district prospered as a post town along the Kamakura Kaido Road. The smoked tofu became an essential item for crossing the mountain, as it keeps well, is light and easy to carry, and also rich in nutrients. Such smoked tofu is unique in Japan. Tofu is seasoned with Gujo soybean paste and smoked with cherry wood chips. The smoking time is adjusted depending on the day s weather, temperature and humidity. It exhibits the masterly skills passed down since the Kamakura period (85-333). () The Gujo Motai Smoked Tofu Traditional Food Culture Committee was established as part of Aeon s Food Artisan project, which strives to inherit traditional skills through partnerships with producers who are working to preserve local specialties. Food Artisan () SPECIAL FEATURE Enriching Food for Better Urban Life Commercial facilities and major corporate bases are concentrated in large cities such as Tokyo. Meanwhile, as a place to live, these cities have their own inconvenient features. For example, higher costs of living for food, clothing and housing in general, and commuting in crowded trains is mentally and physically stressful and imposes time constraints. Resolving these urban challenges and developing a better living environment is an essential theme that should be tackled in tandem with regional revitalization. This issue features an interview with economic analyst, Akira Okada, on measures to realize a better urban life and the roles that should be carried out by corporations. With the focus on food, this issue introduces how Aeon is working to resolve the negative aspects of urban life and the meaning of these initiatives. Illustration by KOUJI MIYANO 0 The Power of Local Specialties 02 Special Feature contents Enriching Food for Better Urban Life Interview In Quest of Urban Prosperity Visiting professor at Osaka University of Economics and economic analyst case:0busy but making it delicious and fun Responding to the need, I want to cook case:02everyday with ease Offering everyday food items nearby at reasonable prices case:03both for normal days and for party days Adding new repertoire to the table case:04in-between work or before heading home Creating a place in the office district to relax any time 2 Epicurean Delights 3 Aeon Sustainable Activities 4 Aeon Financial Results 5 Group News 7 Group Companies December 205 Vol.5 Cover Art by TATSUYA TANAKA A photographer who portrays a unique view of the world using miniature diorama figures and daily items and food as motifs. For this special feature, depicting life in the city centered on food. Published on December, 205 by the Corporate Communications Dept. of Aeon Co., Ltd. -5-, Nakase, Mihama-ku, Chiba-shi, Chiba, , Japan Tel (+8) Website: :2052 : (+8) : Aeon magazine is published by Aeon Co., Ltd. Aeon is also the name of a corporate group. Opinions expressed in Aeon magazine are not necessarily those of the publisher. Aeon 205 December Vol.5 Illustration by MARIKO YAMAZAKI 2

3 Interview SPECIAL FEATURE Enriching Food for Better Urban Life Better urban development starts with taking another look at what we take for granted The decision to hold the 2020 Summer Olympics and Paralympics in Tokyo has triggered a move to take another look at the paradigms that shape the major city. The aging infrastructure such as roads and buildings need to be repaired, along with the need to promote barrier-free design and reduce environmental load. And in addition to improving the comfort for both domestic and foreign travelers to Tokyo and its residents, taking actions to counteract the accelerating aging population is an urgent issue. Urban areas other than Tokyo and certainly cities abroad will eventually face similar challenges. Thus, how Tokyo manages the situation is drawing attention as the model case for the future. A city is a very convenient area with developed public transportation and many cultural and commercial facilities. On the other hand, however, it has little nature and is vulnerable to disaster. Some people also feel inconvenience due to the concentration of population, such as traffic congestions, complicated train transfers, and having to move up and down between the ground floor and deep underground platforms. To resolve these negative aspects and develop a livable city for all people, it is important to take another look at what we take for granted and make improvements from there. Consumers and companies, in addition to municipalities must take the lead in this initiative. For example, have you ever seen the Convenient transfer map posted on pillars at subway platforms in Tokyo? It shows passengers which train car to board for a smooth transfer. A woman traveling with her child came up with this map, based on her own experience of having Consumers, municipalities and companies must go beyond their framework to cooperate and work toward solving issues related to urban life. Akira Okada In Quest of Urban Prosperity This issue provides insight on the problems faced by urban areas, measures to make urban life more prosperous, as well as corporate roles needed to realize it, through an interview with Akira Okada, an economic analyst and a visiting professor at Osaka University of Economics. Profile Visiting professor at Osaka University of Economics and economic analyst. Joined Nikkei Inc. in 97. After working as a journalist, transferred to TV Tokyo Corporation. Served as President of TV Tokyo America, Inc., director and chief news commentary of TV Tokyo Corporation, and became a freelancer in TV TOKYO Corporation 2006 trouble finding an exit or an elevator while pushing the stroller. Today, such map is widely used by JR and other private railways. As this example shows, it is important to encourage everybody to exchange ideas regardless of their position, and cooperate toward resolving negative factors to make the city a better place, as I believe that there is still much room for improvement. None other than retailers familiar to consumers serve as the community base Private companies are playing an even greater role in the process of capturing the needs of urban consumers and putting them into tangible form. Consumers nowadays are more budget-minded due to Japan s prolonged deflation, and they select products more carefully by weighing the balance between quality and price. Meanwhile, they want to take time off from economizing and splurge once in a while. Their consumption shows a clear pattern between when they spend and don t spend. Therefore, companies in order to survive must be able to capture consumer needs more accurately than ever before. Moreover, companies will need to make an effort to go beyond their usual business framework. Especially the retail business with daily contacts with consumers has particularly close connections with the community. By selling products as well as providing various services, retailers could respond to a range of consumer needs, including those of the elderly, working women, and families raising children. There are more opportunities for retailers to exert its power, such as taking on a community role in urban areas where interpersonal connections tend to be weak. Besides developing the retail business, Aeon has just begun to establish nursery schools inside shopping malls. This move is significant socially, as the facility complements public services in the community in addition to serving an important purpose internally to pursue a better working environment for its employees. Retailers must make an effort to go beyond their usual business framework to fulfill their roles as a community infrastructure and directly capture consumer voices, as retailers stand closest to consumers. Aeon is a fine example that is putting this into practice. By serving as a base for daily life and services or as a central figure in the development of each community, I hope that Aeon will continue to focus its efforts on responding to the needs of consumers as well as the society as a whole December Vol.5 4

4 SPECIAL FEATURE Enriching Food for Better Urban Life This feature focuses on dietary life in the city to examine case-bycase, Aeon s initiatives that respond to consumer needs. I want to be particular about what I choose from a sales floor with a wide selection case:0 Busy but making it delicious and fun Responding to the need, I want to cook I want to enjoy shopping with my children I want suggestions to make me want to cook. Highly specialized lineup, including natural cheese, liquor, and imported food Shopping on behalf of a faraway family By using Aeon s online supermarket, customers in the city can help in day-to-day shopping for family members who live far away. Some customers say they feel a sense of security when they receive products from a familiar store. The service is made possible because Aeon has its outlets across the nation. Urban areas are concentrated with stores selling food, such as department stores, supermarkets, convenience stores, specialty stores, and restaurants. With an aim to be selected among these stores and restaurants, Aeon has launched new challenges. One of them is to develop stores and services that respond to the needs of customers who want to enjoy healthy and fulfilling meals every day Botanical Shop, proposing a lifestyle that incorporates the botanical nutrition power Botanical Shop 3. Juice Bar, offering fresh squeezed juices made with fresh fruit and superfoods with high nutritional value Juice Bar 4 4. Fish and other sections are strengthening direct communication with customers ( 4 Food Style Store, Daiei Kobe Sannomiya Store) ( 4 Food Style Store Daiei) Improving sales floors that meet the needs to eat and cook good food The Daiei, Inc. has been concentrating business development in the Tokyo metropolitan and Kyoto/Osaka/Kobe areas by specializing in food, and aims to establish new store formats called Urban-style Supermarket and Food Style Store. The company emphasized on responding to the needs of not cooking, so that its main target, working women in urban areas, did not have to cook when they were busy. However, the fact is that working women are willing to cook but are not able to cook due to circumstances. Thus, the company decided on a concept to offer three common values for the above two store formats: Cooking is fun, Shopping is exciting, and Delicious food is waiting for you. The Urban-style Supermarkets have developed a wide selection of foods starting with fresh produce, while also providing menu ideas and recipes. Besides these initiatives, Food Style Stores are also providing more specialized information and products to enjoy food, based on the key words of health, ecology, information and community. At Daiei Kobe Sannomiya Store (Hyogo Prefecture), the first Food Style Store in the Kyoto/Osaka/Kobe area, Daiei introduced its first live kitchen in the meat section. Meat that are sold at the store are cooked in front of customers and offered as freshly made boxed meals or prepared dishes. In the fish section, a countertop is set up at the center of display stands laid out in a square shape, where customers are able to ask about cooking methods and menus for fish, or see how the fish they ordered is cut and trimmed. This setup places importance on the conversation that takes place at the store, to allow customers to enjoy themselves while shopping. Meanwhile, Botanical Shop offers food and cosmetic products featuring botanical nutrients to respond to the higher beauty and health-conscious consumers. The store proposes a new lifestyle centered on food. The Daiei, Inc. plans to strengthen these two store formats, Urban-style Supermarket and Food Style Store, and aims to become the No. General Food Retailer in Japan highly specialized in food. Offering exciting shopping experiences wherever you are Many families with small children and the elderly seem to feel dissatisfied because they want to cook, but don t have time to shop leisurely, or carrying heavy bags is hard. To respond to these needs, Aeon offers an online supermarket Shop at Home, Aeon Net Super to allow customers to enjoy shopping at home or wherever they are. The store staff select products on behalf of the customer and delivery them. Besides, based on customer requests, more stores are offering the service to deliver products to a designated place within residential premises, so that customers can receive products even when they are not at home. For customers who are not used to ordering online, some stores accept orders by telephone or fax using a catalogue. Aeon is working to improve convenience so that more customers can enjoy shopping with Aeon December Vol.5 6

5 SPECIAL FEATURE Enriching Food for Better Urban Life case:02 Everyday with ease Offering everyday food items nearby at reasonable prices I want to do my shopping at a store nearby I want to reduce daily food expenses as much as possible I'm happy when I can quickly find what I need. My Basket aims to become the everyday store and serve as the refrigerator of customers in the community (My Basket Shintomichoeki-Mae Store) My Basket (My Basket ) 2 Regularly stocked foods such as carrots, potatoes and mineral water are things that people want to purchase with ease and at reasonable prices. In an urban area, there are housewives managing household finances as they lead a busy life, single persons wishing to reduce food spending, the elderly who want to cook with familiar ingredients, as well as people who don t have the time or strength to go a long way in search of a lower priced store. Therefore, key points in choosing a store would be whether it is easily accessible every day and whether necessary products can easily be found. 23. A. Colle strives to offer the lowest prices in the community with thorough low cost management (A. Colle Takashimadaira chome Store) A Colle AColle 3 Aiming to become a people and wallet friendly store, within walking distance from home The center of the city has few stores handling fresh produce, and if any, they tend to be more expensive compared with supermarkets. In response to the need, I want to purchase fresh produce at reasonable prices, Aeon is implementing a dominant strategy that concentrates small-scale store openings with trade areas limited to walking distances from customers homes. Representative examples are My Basket Co.,Ltd operating small-size supermarkets that spun off from Aeon Retail Co., Ltd. in 202, and A. Colle Co., Ltd. operating small-size discount stores that also spun off in March this year. Under the concept, nearby, low price, clean and friendly, My Basket Co.,Ltd has opened 609 stores (as of the end of October 205) concentrated in urban areas, particularly in the 23 wards of Tokyo, and Yokohama and Kawasaki Cities in Kanagawa Prefecture where there are fewer stores handling fresh produce. The company is aiming to develop stores for everyday use that can serve as the refrigerator of customers in the community. Prices are low every day, while there are no certain sales days and the product lineup is basic. Attention is given to store flooring and lighting to offer a pleasant shopping environment during the short-time stay in stores. In addition to being close in terms of distance, the store also tries to be close to the heart of customers, by such ways as making sure to greet customers when they enter the store. Some customers come several times a day, as if the store actually were their refrigerator, and others have become familiar faces among the store staff. Meanwhile, under the concept of Offering customers daily necessities at low prices, A. Colle Co., Ltd. has opened 32 stores (as of end of October 205) in Tokyo, Saitama and Chiba Prefectures. Its greatest feature is the challenge to offer the lowest prices in the community based on everyday low price. Because it is a small-sized store, the number of items that can be handled is limited. Therefore, products are selected based on the Table Index (TI), values representing the probability of appearing on customers dining tables, and POS data. For customers, this could be an advantage because they can quickly find what they are looking for after entering the store. Thorough low cost management is also carried out to realize low prices. For example, store operations have been streamlined through the introduction of the automatic replenishment ordering system and others. This environment allows employees to concentrate on work such as attending to customers, checkout, product inspection and shelf stocking. By promoting simple store management with improved efficiency, a store manager is able to manage multiple stores in the vicinity. In such way, reasonable prices are realized by controlling cost expenses in a well-balanced manner. My Basket, as well as A. Colle, have received feedback from customers every time a new store opens, such as I m happy a store has opened nearby and The low prices are great. By the end of 208, My Basket plans to open,000 stores, while A. Colle is planning to open 400 stores, both aiming to become stores that are always convenient for customers 365 days a year December Vol.5 8

6 SPECIAL FEATURE Enriching Food for Better Urban Life case:03 Both for normal days and for party days Adding new repertoire to the table The tables of Japanese households are lined with not only Japanese food but also dishes from around the world like mapo tofu, pasta and kimchi. And in urban areas with a variety of restaurants available, people seem to eat out more often. In fact, Tokyo has the highest dining out rate in Japan*, according to the Family Income and Expenditure Survey by the Ministry of Internal Affairs and Communications. To meet the needs of even those who live in these cities, Aeon has begun making proposals related to food. I want to stock dishes that I can quickly serve even for unexpected guests I want to enjoy authentic cuisine that's easy to cook I want to easily enjoy ingredients and gourmet food from overseas served in restaurants in France. For example, some customers said about foie gras, It s great how I can easily enjoy it at home. Others mentioned that family members have complimented how cooking has improved when Picard products appear on the table. For everyday meals or as a dish to liven up the table on a special day, Aeon will offer new proposals for the customer s dining table. Supermarkets are evolving by going beyond corporate frameworks United Super Markets Holdings Inc., to which three supermarket operators based in the Tokyo metropolitan area, The Maruetsu,Inc., Kasumi Co.,Ltd., and Maxvalu Kanto Co., Ltd. belong, is implementing joint procurement and other initiatives for cost reduction, while offering products responding to different customer needs for each store. Especially in central Tokyo, The Maruetsu,Inc. is actively opening Maruetsu Petit stores, which are mini-supermarkets with areas around 30 to 500 square meters. The stores have a wide selection of fresh produce, especially fruits and vegetables, sashimi, and Japanese beef. They also propose ideas that add a nice touch to dining tables at home by offering seasonings, spices, and the much-talked-about superfoods. Meanwhile, Peacock Store, operated by Aeon Market Co., Ltd., has enhanced its lineup of selected products, such as foods for holding a party at home, wines, and organic products. Each company is deeply rooted in the lives of store customers and is continuing to take on the challenge to respond to the food needs of the city that is evolving from day to day. Proposing a new food culture with frozen food, combining good taste and beautiful presentation For years, Aeon has been making new proposals related to food through cooperation with business partners and manufacturers. For example, Organic Food Series from Topvalu Gurinai is developed in light of the trend toward healthier and more natural products. Aeon is also offering MSC-certified* 2 products (Marine Eco Label) for wild seafood caught with a sustainable and socially responsible method, and ASC-certified* 3 products for responsibly farmed seafood. Furthermore, Aeon has launched a new challenge in the area of frozen food with the introduction of products from Picard, the most popular frozen food specialty store in France. Frozen food in Japan has evolved from the perspec-. Enjoy authentic cuisine by simply cooking in a frying pan Picard s Foie Gras Slices from Southwestern France Picard tive mainly of easy cooking and convenience. However, with the introduction of Picard products, Aeon aims to add a new value from a different perspective, that using frozen food can be fun and enrich dinner tables in Japan. From November 204, a Picard section has been set up for the first time in Japan at Aeon Tamadaira-no-mori Store (Tokyo). Since then, nine Aeon and Daiei stores in Tokyo and Chiba Prefecture have introduced a Picard section (as of end of October 205). The section offers a lineup of dishes made with typical French ingredients such as duck meat, foie gras, and truffle, as well as colorful hors d oeuvres that go well with wine, and café menus. The products made with Picard s unique freezing techniques can easily be prepared in an oven or a frying pan, and offer high quality that can be enjoyed at home and even 2 2. Selected high-end canned food and spice section (Peacock Store Shibaura Island) (Peacock Store Island) * Dining out rate was calculated based on data from Family Income and Expenditure Survey (Income and Expenditure 204) by the Ministry of Internal Affairs and Communications () 204 *2 The Marine Stewardship Council *3 The Aquaculture Stewardship Council December Vol.5 0

7 SPECIAL FEATURE Enriching Food for Better Urban Life case:04 In-between work or before heading home Creating a place in the office district to relax any time I'm looking for a place for a quick drink after work I want to enjoy healthy meals during a limited-time lunch break on working days Epicurean Delights Food is what sustains a healthy life and is also culture portraying the natural features and values of each country. Where there is delicious food, there are people full of smiles. This issue features epicurean delights that bring smiles to the people of Japan, China and ASEAN when celebrating the New Year. Osechi Ryoryi Many wishes packed in tiered boxes Osechi Ryoryi for the New Year is prepared in advance at the end of the year. They say one of the reasons for this was to prevent fire caused by cooking at the beginning of the New Year. The tiered boxes are packed with dishes that reflect the wishes of the ancestors. Taro that produces many roots hopes for the prosperity of descendants, and shrimp wishes for long life until the back is curved. A place where people working in central Tokyo can easily obtain healthy meals, where people can stop by in-between a busy work schedule and refresh themselves. A store with such a new style is introduced. Easily enjoy healthy meals even in between work In September 204, Ministop Co., Ltd., operating convenience stores, introduced a new store format called cisca. The name is short for city small café, and it was developed under the concept of freshly made, healthy feeling, and connection. Stores have opened in office areas in central Tokyo. The main target is working women in the 20s to 40s. A café, delicatessen and grocery were merged together to meet the demand of customers who want to easily enjoy healthy food, and an enhanced product lineup offers brown rice balls, vegetable soups and salads. The limited store space is designed so that shoppers can easily move around, and the shapes of display shelves were also given careful thought. And for customers to enjoy discovering new products, unique POP materials are made to introduce new products and items recommended by the store staff, and the display around the cashier changes by time zone. The space for eating in also accommodates customers stopping by for a quick drink after work. Glasses for drinking alcohol are provided, snacks are warmed up and served on a plate, and wines, craft beer and other types of alcohol are available. These innovative ideas have created a place not only to buy products, but also a space to relax for those working in the office district. JA AN THAILAND Nian Ye Fan Sumptuous meal lined with dishes that bring good luck Nian Ye Fan is the general term for the sumptuous meal for the lunar New Year s Eve when family members get together. Dumplings are one of the representative menus. In northern China, dumplings were enjoyed when family members gathered to greet the New Year at midnight, and this custom spread throughout China as a menu for Nian Ye Fan. In later years, dumplings were shaped like money to wish for fortune in the coming year. Responding to customer needs and helping realize a better life In a city, many people must coexist together in limited space and time. Lifestyles and values are diverse, and changes take place at a fast pace. People s needs related to food have also diversified. Aeon has been working to respond to these needs and to resolve the inconvenience unique to a city. By facing the challenges of each community, Aeon will contribute to making customers lives more healthy and prosperous. 2. Space for eating in has a comfortable atmosphere for women (cisca Nihombashi-Honcho Store) (cisca) 2. Welcomes customers for a quick drink after work Khao Chae Rare Thai dish that is served cold Khao Chae is prepared by soaking rice cooked slightly firmer than usual in iced water scented with jasmine and other flowers. It is served with savory deep-fried dishes, salty-sweet dried pickled radishes, fried onions, and other side dishes. Originally a custom enjoyed by the Mon minority ethnic group, Khao Chae became popular as court cuisine during the reign of King Rama V around the 9th century. Mon 5(9) () CHINA 205 December Vol.5 2

8 Jul. Sep. 205 Striving for a sustainable society, Aeon continues environmental preservation and social contribution activities with local communities. About 90,000 paper cranes with wishes for peace 9 8 students discussed the issues of Tianjin Waste Management 8 Aeon employees participated in the volunteer activities The 4th Japan-China International Symposium on Environmental Issues Held On September 8, Aeon Environmental Foundation held the 4th Japan-China International Symposium on Environmental Issues in Beijing, China. Globally active specialists and experts in the field from Japan and China discussed the theme of Environmental improvement and sustainable development of society. To conclude the Symposium, the Aeon Beijing Environmental Proposal was announced to further promote private-sector exchanges in the environmental field between Japan and China through tree planting and youth environmental education activities for the youth during the three years from 206. Platinum Sponsor Aeon Supports the 23rd World Scout Jamboree Aeon supported the World Scout Jamboree held with an aim to encourage youths to understand each other on a global level. The event was held in Yamaguchi Prefecture from July 28 to August 8, gathering about 34,000 scouts from 55 countries and regions. Through cooperation with the Scout Association of Japan, Aeon rolled out the National Orizuru (paper crane) Caravan at Aeon stores prior to the event. About 90,000 paper cranes folded through the Caravan were presented to the Hiroshima Peace Memorial Park. High School and University Students from Six Countries Interact at Asia Youth Leaders 205 Aeon % Club Foundation has held Asia Youth Leaders since 200, a program where Asian students who will lead the next generation foster better understanding about social issues and diversity in values. The program this year was held from August 6 to 22, in Tianjin, China, gathering students from China, Japan, Indonesia, Malaysia, Thailand and Vietnam. They gained a better understanding through site visits and discussions, and proposed an approach to solving waste management issues to the Tianjin government. Support for Early Recovery and Restoration from the Heavy Rainfall Disaster in Kanto and Tohoku Regions To support recovery from the damage caused by heavy rainfall in the Kanto and Tohoku regions in September, Aeon % Club Foundation donated a total of 5 million yen as emergency aid from the Group to Ibaraki, Tochigi and Miyagi Prefectures. Donations were also collected at 7,000 locations including Group stores. The total amount of 49,340,952 yen was presented to the three Prefectures. In addition, Group employees are also participating in volunteer activities to promote early recovery and restoration. Making Wishes for Recovery from 3. Come True 3. Aeon is conducting a variety of initiatives in partnership with customers to realize recovery and a bright future in the disaster-afflicted areas. Launch of Towel Handkerchief Made with Cotton from the Tohoku Region On July 4, Aeon Retail Co., Ltd., introduced a towel handkerchief made partly with cotton grown in Miyagi Prefecture through collaboration with ten-i muhou, the organic cotton specialty store. The product connects cotton producers who suffer from damage to farmland caused by salt and other reasons, with customers who wish to support the Tohoku region. Cotton is being grown on farmland that has become unsuitable for rice farming. 74AEON Retail Co., Ltd December Vol.5 Environmental Preservation Social Contributions ,000 ORIZURU Caravan % %,500 7,000 4, Tree Planting of 5,000 Torch Azaleas at Ooshima, Kesennuma City in Miyagi Prefecture On September 27, the 3rd Aeon Tohoku Reconstruction Hometown Forest Program was held together with Kesennuma Ooshima Tourism and Convention Bureau. About 5,000 torch azalea trees were planted with the local people, aiming to restore the nature of Ooshima and the local economy. 5, , FINANCIAL RESULTS For the Six Months Ended Aug. 3, Posted Record High in Operating Revenue, All Profits in the Financial Results Increased Aeon promoted its common strategy to accelerate the four shifts to Asian markets, urban markets, senior-oriented markets, and digital markets, as well as product-oriented reforms as set forth in the Aeon Group Medium-term Management Plan (FY ). While concentrating the allocation of management resources in the growth areas, Aeon is implementing structural reforms in the business and organization that support the above initiatives. In this second quarter, the Group s earning power improved owing to the following factors: solid results in the Financial Services Business and Shopping Center Development Business, recovery of performance in the Supermarket and Discount Store Business, besides having built a business foundation for the Drugstore and Pharmacy Business. With an aim to establish the No. supermarket chain in Japan, United Super Markets Holdings Inc. launched in March has taken advantage of synergies such as joint procurement by its three affiliated companies, The Maruetsu, Inc., Kasumi Co.,Ltd., and Maxvalu Kanto Co., Ltd. Meanwhile, The Daiei, Inc. promoted new services and the development of sales floors to customers in urban areas through the introduction of a new store format, Food Style Store. In the General Merchandise Store Business, Aeon Retail Co., Ltd. transferred its authority to regional companies. The company enhanced product lineups featuring a local color, while revitalizing existing stores. Its performance showed a moderate recovery trend supported by factors such as the shift to a new store format, Aeon Style. In the merchandising area, Aeon developed products offering new value, such as the Greek yogurt and ASC-certified raw Atlantic salmon from Aeon s private brand Topvalu, and promoted them to expand sales. In ASEAN, Aeon strengthened its business foundation through a capital/ business tie-up with two local supermarket companies in Vietnam. Aeon also expanded business in new areas, including the opening of Aeon Mall BSD City, the first Aeon Mall in Indonesia. As a result, consolidated operating revenue posted a record high, and consolidated operating income increased by 66% on a year-on-year basis. Aeon Group will continue to make a concerted effort under its common strategy and aim to achieve the full year performance plan and steady growth. For the Six Months Ended August 3, 205 (Cumulative) Financial Results by Business Segment * () Aeon Style Tonami (Tonami City, Toyama Prefecture, Japan) AEON STYLE() (204206) 2SM DS 3United Super Markets Holdings Inc. SMThe Maruetsu,Inc. KASUMI CO.,LTD.MAXVALU KANTO CO., LTD. The Daiei, Inc. Food Style Store GMS AEON Retail Co., Ltd. AEON STYLE TOPVALU ASC BSD CITY 66% (00 millions of yen) (YOY) ( Operating Revenue Operating Income General Merchandise Store (GMS) Business GMS 3, % -87 Supermarket & Discount Store Business SMDS 5, % 6 Small Size Store Business,786.6% 248.3% Drugstore & Pharmacy Business 2, % % Financial Services Business,7524.6% % Shopping Center Development Business,3262.8% % Service & Specialty Store Business 3,74704.% 642.7% International Business 2,722.2% -9 Consolidated Total *2 2 40,7488.7% % Consolidated Operating Results Forecast Operating Revenue 80, GMS:, SM:, DS: Operating Income, Ordinary Income, * Past fiscal years performance is revised in accordance with this fiscal year s accounting policy and indicators. *2 Consolidated total includes total for each business as well as other business and adjustments. 2 (00 millions of yen) (YOY) Net Income

9 Jul. Sep. 205 GROUP NEWS 7 Launch of Mirai (future) College Project Zwei Co., Ltd., together with Dentsu Inc. and Daiichi Progress Inc., have launched the Mirai (future) College project aiming regional revitalization through community vitalization and matchmaking service. Targeting unmarried persons in their 20s and 30s, the project will offer Life Design Support Seminars to assist participants with making and carrying out specific life plans, conduct Exchange Tours to Experience Life in the Province and others, combined with local PR events. Mirai College ZWEI CO., LTD.DENTSU INC.Daiichi Progress Inc. Mirai College 2039 PR Kick off event held in Tokyo 7 8 Aeon Became the First Retailer Group to Sign Top Partner Agreement with J. League Aeon became the first retailer group to sign a top partner agreement with Japan Professional Football League (J. League). With foremost emphasis on soccer, the two parties will effectively utilize various assets they have to contribute to the local community, such as issuing an Soccer Daisuki (I Love Soccer) WAON to deepen collaboration with each club. J.LEAGUE () (J.LEAGUE) WAON Right / Mitsuru Murai, J.League Chairman Left / Soichi Okazaki, President of Aeon Retail Co., Ltd. / (J.LEAGUE) / AEON Retail Co., Ltd Aeon Group's Headquarters for ASEAN Concludes Comprehensive Cooperation Agreement with Union of Kansai Governments Aeon Group s Headquarters for ASEAN has concluded a comprehensive cooperation agreement with the Union of Kansai Governments, comprised of seven prefectures and four ordinance-designated cities in the Kansai region. Networks and resources of both parties will be utilized to provide customers in the ASEAN region with attractive information on local specialties and tourism of the Kansai region. 74 Signing ceremony of the comprehensive cooperation agreement between Aeon Group s Headquarters for ASEAN and the Union of Kansai Governments 8 27 The Daiei, Inc. Opens the First Food Style Store in the Kyoto/Osaka/Kobe Area The Daiei, Inc. renovated the Daiei Kobe Sannomiya Store in Hyogo Prefecture and opened Food Style Store, the first urbanstyle strategic store format in the Kyoto/Osaka/Kobe area. In addition to offering a wide variety of fresh produce and prepared dishes, the store has realized an extensive lineup of specialized products such as through the introduction of Botanical Shop handling plant-derived food and cosmetic products. The store will propose new lifestyles centered on food. The Daiei, Inc. Food Style Store The Daiei, Inc. Food Style Store Daiei () Botanical Shop Daiei Kobe Sannomiya Store Daiei Aeon s e-money WAON WAON Cumulative number of cards issued Approx.52.6 million (As of end September 205) On August 6, Aeon launched Topvalu Gurinai Raw Atlantic Salmon carrying the ASC certificate granted to responsibly farmed seafood. 86 ASC TOPVALU Gurinai Rehabilitation day care facility Aeon Smile AEON Smile 5, Issued on July 25 Eco Island Miyakojima WAON 725 Eco Island WAON Aeon Mall Tianjin TEDA that resumed business December Vol.5 59 Stores Transferred from The Daiei, Inc. to Aeon Group Companies A total of 59 stores operated by The Daiei, Inc. in the Hokkaido, Chubu, and Kyushu regions were succeeded by Aeon Hokkaido Corporation, Maxvalu Hokkaido Co., Ltd., Aeon Retail Co., Ltd., Aeon Kyushu Co., Ltd., and Maxvalu Kyushu Co., Ltd. The attempt was to realize the growth strategy of The Daiei, Inc., which aims to become the No. General Food Retailer in Japan, with a concentration of stores operating in the Tokyo metropolitan and the Kyoto/Osaka/Kobe area, and to consolidate and optimize the management resources of Aeon Group. The Daiei, Inc.59 The Daiei, Inc. AEON Hokkaido CorporationMaxvalu Hokkaido Co., Ltd.AEON Retail Co., Ltd. AEON KYUSHU Co., Ltd. Maxvalu Kyushu Co., Ltd.The Daiei, Inc Development of Aeon Smile, a Rehabilitation Day Care Facility Rooted in the Community Aeon Retail Co., Ltd. began full-scale development of rehabilitation day care facilities for the elderly called Aeon Smile. Aeon Smile Noa SC Store opened following two locations that had opened in advance. Under the concept, What only Aeon can do as a member of the local community, Aeon Smile will offer services focusing on maintaining and strengthening physical functions through rehabilitation and other methods. The target is to open 50 locations by AEON Smile AEON Retail Co., Ltd. AEON Smile AEON Smile Noa SC Aeon, Promoting Diversity Management, Received Several Awards Related to Employment of Persons with Disabilities Good Practices to Improve Workplaces Employing Persons with Disabilities Aeon Supercenter Merit Award (President's Award from Japan Co., Ltd. Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers) ( ) Abilities Jusco Co., Ltd. One employee Aeon Co., Ltd. Aeon Retail Co., Ltd. Abilities Jusco Co., Ltd. Excellent Businesses Employing Persons with Disabilities Award from the Minister of Health, Labour and Welfare Person with Disability with Excellent Service Excellent Businesses Employing Persons with Disabilities President's Prize for Effort from Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers *Jointly Received the Award Aeon Mall Tianjin TEDA Reopens After Temporary Closure Due to Explosion Aeon Mall Tianjin TEDA, which had temporarily closed due to the explosion in Tianjin, China, has partially reopened. To fulfill the mission as a retailer to support the daily life of customers, the mall first resumed operations in the sale of daily necessities. Other sales floors and specialty stores reopened after safety confirmation and preparations to resume sales were made, and the entire mall reopened on November. 6

10 GROUP COMPANIES 集团企业一览 Pure holding company AEON CO., LTD. General Merchandise Store Business AEON Retail Co., Ltd. AEON Hokkaido Corporation SUNDAY CO., LTD. AEON KYUSHU CO., LTD. AEON SUPERCENTER Co., Ltd. AEONBIKE CO.,LTD. AEON Bakery Co., Ltd. AEON LIQUOR CO.,LTD. AEON RYUKYU CO.,LTD. JOY Co., Ltd. TOPVALU COLLECTION CO., LTD. Bon Belta Co., Ltd. Supermarket & Discount Store Business United Super Markets Holdings Inc. Maxvalu Nishinihon Co., Ltd. Maxvalu Tohoku Co., Ltd. Maxvalu Tokai Co., Ltd. Maxvalu Chubu Co., Ltd. Maxvalu Hokkaido Co., Ltd. Maxvalu Kyushu Co., Ltd. Inageya Co.,Ltd. Belc CO.,LTD. WonderCorporation Co.,Ltd. A Colle Co., Ltd. ATHINE, Inc. ALTY FOODS Co.,Ltd. AEON BIG CO., LTD. AEON MARKET CO., LTD. OrangeFoodCourt, Inc The Kagoshima Sunrise Farm Inc. KASUMI CO.,LTD. KASUMI GREEN CO.,LTD. KASUMI TRAVEL CO.,LTD. CREATE Co., Ltd. KYOEI AUTOMALL AND INSURANCE CO.,LTD. KOHYO CO., LTD. SANYO MARUNAKA CO.,LTD. The Consumer Economics Research Institute, Inc Food Quality Control Center, Co., Ltd. The Daiei, Inc. Daiei SpaceCreate Co., Ltd NAKAGO Co., Ltd. JAPAN DISTRIBUTION LEASING CORPORATION BIG-A CO.,LTD. BIG-A KANSAI JAPAN CO.,LTD. Bonte, Inc. MAXVALU KANTO CO., LTD. MAXVALU NAGANO CO., LTD. MAXVALU HOKURIKU CO., LTD. MAXVALU MINAMI TOHOKU CO., LTD. The Maruetsu,Inc. Maruetsu-Development Co., Ltd. Maruetsu Fresh Foods Co., Ltd. marunaka CO.,LTD. Marno Co., Ltd. Red Cabbage Co., Ltd. LOGIONE Co., Ltd. THE LOBELIA, Inc. ROSE CORPORATION CO.,LTD. OPA CO.,LTD. The Maruetsu (Hong Kong), Co., Ltd. Maruetsu (Wuxi) Co., Ltd. Aeon Maxvalu (Guangzhou) Co., Ltd. Aeon Maxvalu (Jiangsu) Co., Ltd. Aeon Maxvalu (Qingdao) Co.,Ltd. ichimaru Co., Ltd. Seibu Co.,Ltd. TENDAI CO., LTD. Japan Education Center for Future Retailing, Inc. WonderNet Co.,Ltd. Small Size Store Business MINISTOP CO., LTD. ORIGIN TOSHU CO., LTD. Network Service Co., Ltd. My Basket CO.,LTD MINISTOP KOREA CO., LTD. MINISTOP VIETNAM COMPANY LIMITED QINGDAO MINISTOP CO.,LTD. ROBINSONS CONVENIENCE STORES, INC. Drugstore & Pharmacy Business WELCIA HOLDINGS CO., LTD. Medical Ikkou Co., Ltd. TSURUHA HOLDINGS Inc. KUSURI NO AOKI CO., LTD. WELCIA KAIGO SERVICE Co., Ltd. WELCIA YAKKYOKU Co., Ltd. SHIMIZU YAKUHIN CO.,LTD. TAKIYA Co., Ltd. 7 Listed Companies are shown in bold print Equity-method Affiliates Affiliated Companies CFS Corporation Lianhua merrylin business (Shanghai) limited company Welpark Co., Ltd. ZAG ZAG Co., Ltd. Financial Services Business AEON Financial Service Co., Ltd. AEON CREDIT SERVICE(ASIA)CO., LTD. AEON THANA SINSAP (THAILAND) PLC. AEON CREDIT SERVICE(M)BERHAD AEON REIT Investment Corporation AEON BANK, LTD. AEON CREDIT SERVICE CO., LTD. AEON S.S.Insurance CO., LTD. AEON HOUSING LOAN SERVICE CO.,LTD. AEON Product Finance Co.,Ltd. AEON INSURANCE SERVICE CO., LTD. AEON Reit Management Co.,Ltd. ACS Credit Management Co.,Ltd. FeliCa Pocket Marketing Inc. ACS CAPITAL CORPORATION LTD. AEON Insurance Service (Thailand) Co., Ltd. ACS SERVICING(THAILAND)CO.,LTD. ACS TRADING VIETNAM CO.,LTD. AEON CREDIT SERVICE INDIA PRIVATE LIMITED AEON CREDIT SERVICE (PHILIPPINES) INC. AEON CREDIT SERVICE SYSTEMS (PHILIPPINES) INC. AEON Leasing Service (Lao) Company Limited AEON MICROFINANCE(CAMBODIA)PRIVATE COMPANY LIMITED AEON MICROFINANCE (MYANMAR) CO.,LTD. AEON MICRO FINANCE (SHENZHEN) CO.,LTD. PT.AEON CREDIT SERVICE INDONESIA AEON MICROFINANCE (SHENYANG) CO., LTD. AEON CREDIT SERVICE(TAIWAN)CO., LTD. AEON CREDIT CARD(TAIWAN)CO., LTD. AEON MICRO FINANCE (TIANJIN) CO., LTD. AEON INSURANCE BROKERS(HK)LIMITED AEON Financial Service (Hong Kong) Co., Ltd. AEON CREDIT GUARANTEE(CHINA)CO.,LTD. AEON INFORMATION SERVICE(SHENZHEN)CO.,LTD. Shopping Center Development Business AEON Mall Co., Ltd. AEON TOWN Co.,Ltd. AEON MALL HIMLAM CO., LTD. AEON MALL VIETNAM CO., LTD. AEON MALL (CAMBODIA) CO., LTD. PT. AEON MALL INDONESIA PT. AMSL DELTA MAS PT. AMSL INDONESIA AEON MALL EDZ WUHAN BUSINESS MANAGEMENT CO., LTD. AEON MALL SUNAN (SUZHOU) BUSINESS MANAGENMENT CO., LTD. AEON MALL YOUYA (BEIJING) BUSINESS MANAGEMENT CO., LTD. AEON MALL YOUYA (TIANJIN) BUSINESS MANAGEMENT CO., LTD. AEON MALL (GUANGDONG) BUSINESS MANAGEMENT CO., LTD. AEON MALL (GUANGZHOUBAIYUN) BUSINESS MANAGEMENT CO., LTD. AEON MALL (HUBEI) BUSINESS MANAGEMENT CO., LTD. AEON MALL (JIANGSU) BUSINESS MANAGEMENT CO., LTD. AEON MALL (SANHE) BUSINESS MANAGEMENT CO.,LTD. AEON MALL (SUZHOU) BUSINESS MANAGEMENT CO., LTD. AEON MALL (TIANJIN) BUSINESS CO., LTD. AEON MALL (CHINA) BUSINESS MANAGEMENT CO., LTD. AEON MALL (CHINA) CO.,LTD. AEON MALL (ZHEJIANG) BUSINESS MANAGEMENT CO.,LTD. AEON MALL (WUHAN) BUSINESS MANAGEMENT CO., LTD. L.A.Style Inc. Service & Specialty Store Business Service Business AEON DELIGHT CO., LTD. AEON Fantasy Co., Ltd. ZWEI CO., LTD. AEON Eaheart Co., LTD. AEON ENTERTAINMENT CO.,LTD. AEON CULTURE CO.,LTD. AEON COMPASS CO., LTD. AEON DELIGHT ACADEMY CO., LTD. AEON DELIGHT SECURITY CO., LTD. AEON DELIGHT SERES CO., LTD. AEON LIFE CO.,LTD. A to Z Service Co., Ltd. KAJITAKU Co., Ltd. Kankyouseibi Co., Ltd. Kantouengineering CO., LTD. General Services, Inc. DO SERVICE CO., LTD. Reform Studio Co., Ltd. A-LIFE SUPPORT Co.,Ltd. FMS Solution Co.,Ltd. AEON DELIGHT (MALAYSIA) SDN.BHD. AEON DELIGHT (VIETNAM) CO., LTD. AEON Fantasy Group Philippines,INC. AEON Fantasy Holdings (Thailand) Co.,Ltd. AEON FANTASY (MALAYSIA) SDN.BHD. AEON Fantasy (Thailand) Co.,Ltd. PT AEON FANTASY INDONESIA Dalian Neusoft Information Services Co., Ltd. Suzhou Rifu Elevator Engineering Equipment Co.,Ltd. SUZHOU SHANGPIN Washing Service Co.,Ltd. SUZHOU ALLIANCE PROPERTY MANAGEMENT CO.,LTD. AEON Fantasy(China)Co., Ltd. AEON EAHEART RESTAURANT (QINGDAO) CO., LTD AEON DELIGHT(Hangzhou)SERVICE OUTSOURCING CO.,LTD. AEON DELIGHT(CHINA)CO.,LTD. AEON DELIGHT Sufang (Suzhou) CO., LTD. Aeon Delight Teda(Tianjin) Comprehensive Facility Management Service Co.,Ltd. Wuhan Xiaozhu Comprehensive Facility Management Service Co.,Ltd. Specialty Store Business GFOOT CO., LTD. COX CO., LTD. Taka:Q Co., Ltd. Abilities JUSCO Co., Ltd. AEON FOREST CO., LTD. AEON PET CO.,LTD AEON BODY Co., Ltd. Claire's Nippon Co., Ltd. Cosmeme CO., LTD. Talbots Japan Co., Ltd. Branshes Co. Ltd MIRAIYA SHOTEN CO., LTD. Mega Sports Co., Ltd. MEGA PETRO Co., Ltd. LAURA ASHLEY JAPAN CO., LTD. AT Japan Co., Ltd. R.O.U CO., LTD. BLUE GRASS(SHANGHAI)CO., LTD. LAURA ASHLEY ASIA CO., LIMITED NUSTEP (BEIJING) TRADE CO., LTD. TAIWAN LAURA ASHLEY CO., LTD. Talbots China CO., Ltd PET CITY (BEIJING) CO., LTD. Digital Business AEON Direct Co.,Ltd. AEON Link Co., Ltd. International Business China AEON (CHINA) CO., LTD. AEON Stores (Hong Kong) Co., Limited GUANGDONG AEON TEEM CO., LTD. QINGDAO AEON DONGTAI CO., LTD. AEON South China Co., Limited AEON EAST CHINA (SUZHOU) CO., LTD. AEON (HUBEI) CO., LTD. BEIJING AEON CO., LTD. ASEAN AEON ASIA SDN. BHD. AEON CO. (M) BHD. AEON BIG (M) SDN. BHD. AEON INDEX LIVING SDN. BHD. AEON (CAMBODIA) Co.,Ltd. AEON(Thailand) CO., LTD. PT.AEON INDONESIA Vietnam AEON VIETNAM Co., LTD DONG HUNG INVESTMENT DEVELOPMENT CONSULTANCY JOINT STOCK COMPANY LIMITED FIRST VIETNAM INVESTMENT JOINT STOCK COMPANY Shared Function Companies and Other YAMAYA CORPORATION AEON Integrated Business Service Co., Ltd. AEON AGRI CREATE Co., Ltd. AEON GLOBAL SCM CO., LTD. AEON TOPVALU CO., LTD. AEON FOOD SUPPLY Co., Ltd. AEON MARKETING CO., LTD. Cordon Vert CO., LTD. Research Institute For Quality Living Co., Ltd. AEON GLOBAL SCM SDN.BHD. AEON TOPVALU MALAYSIA SDN.BHD. AEON TOPVALU (HONG KONG) CO., LIMITED AEON TOPVALU (THAILAND) CO.,LTD. AEON Integrated Business Service CHINA Co.,Ltd. Tasmania Feedlot Pty. Ltd. AEON Global SCM(Beijing)Co.,Ltd. AEON TOPVALU (CHINA) CO., LTD AEON Demonstration Service Inc. AEON % Club Foundation Environmental Foundation The Cultural Foundation of Okada AEON As of the end of August 205