Kusuri no Aoki Holdings - Company History

The Aoki family of Kaga — descended from retainers of the Uesugi who settled in what is now Hakusan, Ishikawa, and served for some four hundred years as village elders and keepers of the local honjin post-station — had run a pharmacy, Aoki Nikaido, since 1869. Aoki Keisei was its sixteenth-generation heir. In January 1985 he did not take over the shop; he set up a separate company, Kusuri no Aoki, in Kanazawa with $62,885 (¥15m) of capital, and left his father’s business the same year. The point of keeping the old pharmacy intact and starting fresh was that he did not want to be in the trade of selling medicines — he wanted to design the assortment and the selling floor himself. “The real job,” he said, “is to shed the trade you are in and pioneer an entirely new format.” The first chain store opened in Kanazawa in March 1986 under the banner of “health, beauty and hygiene.”

Growth was steady rather than dramatic: sales rose from ¥1.5bn in the year to May 1992 to ¥2.3bn, ¥3.1bn, and about ¥4.2bn by May 1995, on roughly seventy employees. From the start the company ran two store sizes — around 400 tsubo and around 150 — chosen by catchment, and it built a combined head office and distribution centre in 1995 rather than letting logistics follow the stores. In 1996 it absorbed the family pharmacy itself along with another local firm. Expanding by swallowing small pharmacies was the method, and it was in place early.

In 1997 the chain crossed into Toyama and then Fukui, covering all three Hokuriku prefectures within a year and reaching about ¥13bn of sales and 37 stores by May 1999 — the largest drugstore chain in the region. Rather than stay independent in procurement, it tied itself to bigger networks: capital and business alliances with the local supermarket group Albis and with Hokkaido’s Tsuruha in 1997, entry into the HAPYCOM joint purchasing alliance with Aeon Welcia in 2001, and a capital and business tie-up with Aeon itself in January 2003. It also read the dispensing market against the grain: Hokuriku had one of Japan’s lowest prescription-issue rates, which the company treated not as a handicap but as room left over, fitting every store with a dispensing counter and a pharmacist before the volumes justified it. In August 2003 the founder became chairman and handed the presidency to his younger brother.

In October 2004 the company opened Kitayasuda in Hakusan, its first new-build store of more than 400 tsubo. The reasoning was arithmetic: in the standard 300-tsubo box, a dispensing counter plus general merchandise filled the floor and left no room for food. Making the larger format the standard was the quiet decision that made everything later possible — it is the floor plan that would eventually hold produce, meat and prepared dishes alongside a pharmacy. The chain crossed into Niigata in 2005.

In February 2006, twenty-one years after founding, the shares listed on the Second Section of the Tokyo Stock Exchange, and the opening pace rose with the capital: 100 stores by March 2007, a first store in Nagano in 2008, promotion to the First Section in 2011, entry into the northern Kanto region from 2012. Dispensing counters were treated as a parallel metric to store count — 200 stores in June 2013, 100 in-store pharmacies the following month.

In May 2014 Aoki Hironori, the founder’s eldest son, became president. A pharmacy graduate of the Tokyo University of Science and a licensed pharmacist who had worked at Otsuka Pharmaceutical before joining the company in 2003, he had run the dispensing business and then sales — and the third generation’s arrival coincided with making the dispensing attachment ratio the company’s headline metric. Through the second half of the 2010s that ratio was pushed steadily up. Japanese policy was moving the same way: drug-price revisions and criticism of the “clinic-gate” pharmacy clustered outside hospitals favoured pharmacies attached to drugstores, on grounds of both patient convenience and cost. The counters and pharmacists installed years earlier were already in place to receive the shift.

By the year to May 2019 consolidated sales were ¥250.8bn with operating profit of ¥14.1bn and a dispensing ratio near 47%, and a regional chain had become a plausible national one. Two structural pieces were also set in this decade: a holding company, Kusuri no Aoki Holdings, created by share exchange in November 2016 and relisted on the First Section, and a new head office at Hakusan in 2019 — the group grew, the base stayed in Ishikawa. The holding structure came with no large acquisition attached at the time; it would earn its keep later.

In June 2021 the company took over the supermarket business of Super Marumo, a grocer rooted in Kanazawa, by corporate split. Produce, meat and prepared foods require sourcing networks and store-operating know-how that a drugstore chain cannot build quickly on its own, so it bought them intact. Aoki Hironori explained the logic in terms of place: in districts like Morimoto in Kanazawa, where drugstores had never opened, the local supermarket was the infrastructure of daily life, and the company wanted that role. What followed was a run of acquisitions — Hifumiya, Homas and Kirinya merged in together in March 2022, then Misaki Store, San-A, Nishigaki, Nakao, and in 2024 even a home-centre business — more than a dozen companies in four years, with six taken in at once around the fortieth anniversary in January 2025. The purchases bought fresh-food merchandising and good sites in the same transaction.

The format was rebuilt to match. The third medium-term plan of February 2022 set three priorities — food, a 70% dispensing ratio, and dominance in chosen areas — and reordered the pricing from weekly specials to everyday low prices on daily staples, which is how supermarkets price and drugstores generally do not. Food went from a few per cent of sales in the 2010s to double digits, drawing a grocery customer into a drugstore. Store count passed 800 in February 2022, 900 in May 2023, and 1,000 in March 2025; sales reached ¥436.9bn in the year to May 2024 and ¥501.4bn in the year to May 2025, with net profit up 45% at ¥17.7bn. Both the 1,000-store and ¥500bn targets landed a year early.

The one target that did not was dispensing: still around 58% in the year to May 2024 and not expected to reach 70%, because each counter needs a licensed pharmacist and hiring cannot outrun store openings. The founder died in May 2024. And in 2026 the company turned its attention to its own independence: with Aeon — by then the owner of Tsuruha, whose future map looked very like Kusuri no Aoki’s own food-and-drug strategy — it ended the capital and business alliance, adopted a takeover defence led by the founding family, and moved off the Prime market. The defence passed with 55.5% in favour.