Company history

In May 1983 Yamamoto Hisao, then thirty-five, opened a drugstore in Midori Ward, Yokohama. Kanagawa in the 1980s was full of households that had arrived during the high-growth years and settled into suburban housing, and the pharmacies serving them were still mostly individual shops. What distinguished Yamamoto’s approach from the start was where he refused to go. While Matsumotokiyoshi, Sundrug and Sugi Pharmacy pushed outward across regions, he kept the openings inside Kanagawa and raised the density instead.

The arithmetic behind that choice is simple and holds up. The tighter the stores are packed into one area, the shorter the delivery runs, the more a single local advertisement covers, and the less time it takes to supervise the shops. Kanagawa is populous enough that one prefecture is already a large market — so lifting density inside it beat spreading thinly across several, and made low prices and profit easier to hold together. The pattern was to open several stores in one city or ward at once, become known there, then move to the adjacent area. The company took the name Create S.D. in 1990 and moved its head office to the centre of the prefecture in 1991, working outward from northern and western Yokohama into Kawasaki, Shonan, Yokosuka and Sagamihara.

The format grew as it spread: medicines, cosmetics and household goods first, then confectionery, drinks and frozen food — high-frequency groceries to bring people in, high-margin drugs and cosmetics to earn on them. Investors could see the effect in the steadiness of same-store growth rather than in size, and the operating company listed on the Second Section of the Tokyo Stock Exchange in December 2005 and the First Section in May 2007. In 2008 a small property company Yamamoto had set up in 1998 was rebuilt as the group’s holding vehicle, designed to carry the drugstore business alongside adjacent lines such as nursing care and dispensing.

The holding company, Create SD Holdings, listed in March 2009 after taking full ownership of the operating company by share exchange. Nursing care followed at once: a retirement-home operator was acquired in April 2009 and a day-service company carved out of it in 2010, placed around the drugstores so that older customers in Kanagawa could get medicines and care within the same cluster.

The larger decision was about who would run the company. Hirose Taizo — a pharmacist trained at Tokyo University of Pharmacy and Life Sciences who had founded and led one drugstore company and then run Sumisho Drugstores — joined in June 2011 and became president of both companies in August 2012. Yamamoto, the founder, did not pass the business to his family. As the separation of prescribing from dispensing advanced, converting Kanagawa’s store density into earnings required experience in running dispensing pharmacies and in building a format that bound prescriptions to groceries — a skill the company did not have. Yamamoto stayed on as chairman, holding his shares and his authority, and gave the daily command to a professional from outside.

Hirose built the store around two pillars: specialty in medicine, convenience in food. The dispensing counter was added to store after store, lifting the share of outlets with a pharmacy from the low twenties in percentage terms toward forty and beyond, which brought in repeat customers holding prescriptions; food was pushed up as the traffic driver. Revenue grew about 1.4 times in his first five years while the operating margin held around 5%, and the dominance method was repeated prefecture by prefecture into Tokyo, Chiba, Saitama, Shizuoka and Aichi.

In February 2020 the company bought Yurigaoka Sangyo, which ran the Yuri Store supermarkets in Kanagawa — its first outside acquisition under Hirose, and a way of adding fresh and daily food to a format built on medicines and sundries. It set the pattern the company has followed since: absorbing local supermarkets and pharmacies into its own operating discipline rather than merging with an equal. The listing moved to the Prime Market in April 2022. Finances stayed unusually plain — effectively no interest-bearing debt and equity around 60% of assets — even as store investment doubled from the ¥10-billion range to more than ¥20 billion a year to prepare the logistics base for the wider Kanto region.

By the year to May 2025 revenue had reached ¥457.0 billion and operating profit $151M (¥23bn), with 728 stores across eight prefectures — 422 of them, about six in ten, still in Kanagawa. Dispensing counters were attached to some 55% of stores, up from the low twenties when Hirose took over thirteen years earlier, and food had risen to about 40% of sales: the “medicine and food” format had reached the shape it was designed for.

Then the growth model itself was changed. Because strengthening food widened the sales floor each store needed, large well-sited properties became harder to secure and the pace of forty to fifty openings a year fell short of plan. Rather than read the shortfall as slack still left in the existing stores, Hirose treated it as the limit of the method, and the mid-term plan Next STAGE 2030, announced in 2025, holds openings down in favour of enlarging existing stores and deepening dispensing, targeting ¥500 billion of revenue in the year to May 2028 and ¥680 billion by May 2030. Growth in speed is to be supplied by acquisitions of local chains — Sun F in August 2025, Yaohan Holdings that October — while Welcia and Tsuruha, and Matsumotokiyoshi and Cocokara Fine, compete by merging. Yamamoto, seventy-seven in 2025, remains chairman with roughly a fifth of the shares.