Blue Zone Holdings - Company History

The line begins in 1890, when Kawano Kotaro opened a greengrocer called Yaoko Shoten in Ogawa, a papermaking town in Saitama. It stayed a single shop through the war; in 1957 his third son Kawano Seizo incorporated it, sixty-seven years after the founding.

The turn came the next year, and it came from an in-law. Kawano Tomo, wife of Seizo’s younger brother, gathered information from trade journals and industry meetings, called unannounced on Matsusei in Maebashi — the first self-service supermarket in northern Kanto — and satisfied herself that shoppers in a provincial town would accept the format. In 1958 Yaoko Shoten converted to self-service and became a food supermarket. While Seiyu, Daiei and Ito-Yokado were racing to open volume stores across the Tokyo region, Yaoko changed only its format and stayed a single Saitama shop. That sequence set the pattern: not price and volume, but choosing the goods to fit the local dinner table.

Institution-building followed the format by decades. Yaoko Co., Ltd. was incorporated in March 1974 with capital of $32,423 (¥10m), and Tomo took the presidency that October, holding it until Kawano Yukio — a University of Tokyo law graduate who had trained four years at Maruetsu before joining in 1969 — succeeded her in 1985. He immediately built the backbone a chain needs: a fresh-food processing centre at Ogawa in 1985, the head office moved to Kawagoe in 1986. Shares were registered over the counter in February 1988, the fiscal year-end shifted to March to match the industry, and the company listed on the Second Section of the Tokyo Stock Exchange in November 1993, moving to the First Section in September 1997.

In October 1998 the Sayama store in Saitama reopened after a full refit as what Yaoko called a lifestyle assortment supermarket. Kawano Yukio had divided the industry in two — everyday lifestyle-assortment stores that propose meals, and commodity-discount stores that compete on price — and told the company Yaoko would be the first. That meant declining the second: while Life, Summit and Maruetsu tried to hold a proposal format and answer discounters on price at the same time, Yaoko put all of its resources into editing the assortment for the dinner table.

The refit was meant as a single experiment. Managers and part-timers at other stores asked to be converted to the same format, and it spread to the whole chain, hardening into the doctrine Yaoko calls kojin-keiei — running each store as its own business. Authority over what to stock, by customer base, locality, season and week, sits with the store manager and staff, not head office; head office standardises procurement and logistics, designs the format and runs the training, and does not intervene in the assortment. For a chain, whose entire logic is standardisation, this was a deliberate inversion.

What made it work was the machinery built around it: a three-year rolling medium-term plan from 1994, redrawn every cycle rather than fixed; the Isesaki distribution centre in 1999 for expansion into northern Kanto; grocery and chilled centres at Sayama in 2002, with the old fresh-food centre converted to prepared foods; Sanmi spun off in 2003 to bring delicatessen manufacturing in-house; a Chiba centre and a training centre in 2006; and the Yaoko card in 2012, putting purchase data behind the store-level assortment decisions. In the year to March 2012 sales were ¥227.3bn with recurring profit of ¥10.6bn and equity at 45% of assets — the returns of the proposal format, and the funding for everything that came next.

In April 2013 Kawano Sumito — an economics graduate of the University of Tokyo who had worked at the Long-Term Credit Bank of Japan, later Shinsei Bank, before joining Yaoko in 2001 — became president at 37, the fifth generation and the third Kawano in succession. Yaoko was then in its twenty-third consecutive year of rising sales and profit. His first years extended the existing model outward: a combined delicatessen and fresh-food centre at Higashimatsuyama in 2014, an online supermarket in 2015, Sanmi absorbed back into the parent, a Yokohama chilled centre for the move into Kanagawa, and Yaoko Farm in 2016, taking the company into growing food as well as selling it.

Then came the break with a single format. In April 2017 Yaoko bought AV Co. and its property affiliate for about $102.5M (¥12bn). AV ran ten low-price supermarkets in Kanagawa with sales of ¥48.3bn, and it was the opposite of everything Yaoko had committed to in 1998. The reasoning was in the market: OK and Lopia were taking share with exactly the price-led formats Yaoko had declined to build, and rather than compromise its own stores, the company chose to own both answers side by side.

Having bought a discount operator, Yaoko then built one: Foocot, a wholly owned company set up in February 2021 to run a discount format of its own design, using what AV had taught it. In October 2021 it took 43% of Sendo, a 25-store chain in Chiba, as an equity-method affiliate, raising this to 66% and full consolidation in April 2024. The eleventh medium-term plan, launched the same month, named the three structural pressures the group was planning against — labour shortage, a polarising consumer and cost inflation — and set the long-term goal the whole company now works to: ¥1 trillion in sales and 500 stores.

The numbers were moving with it. In the year to March 2025 consolidated sales rose 18.9% to ¥708.2bn and operating profit 13.9% to ¥33.4bn, with Sendo alone adding ¥112.9bn; on a parent-only basis it was the 36th consecutive year of higher sales and profit, a record without parallel in Japanese supermarkets. Equity still stood at 48% of assets after a run of acquisitions.

On 1 October 2025 Yaoko transferred its own shares into a new pure holding company, Blue Zone Holdings, listed on the TSE Prime Market. The same day it took full ownership of Bunkado, 19 stores in Tokyo and Kanagawa, and 70% of Delight Holdings, which runs the 12 Cookmart stores in eastern Aichi and Hamamatsu. The six operating companies — Yaoko with 195 stores, AV with 14, Foocot with 5, Sendo with 25, Bunkado with 19 and Cookmart with 12 — were re-arranged as siblings rather than subsidiaries of Yaoko, with strategy, risk management and shared services lifted into the holding company. Kawano Sumito, president of both, is attempting to make the store-level doctrine that Yaoko built over a quarter of a century the operating premise of a group of formats that were never designed around it.