Matsumotokiyoshi sits at the head of the drugstore sector, the biggest chain in Tokyo and one of the most aggressive retail banners of any format. It has struggled to expand into the regions, but Matsukiyo is setting aside more cash for acquisitions.
Matsumotokiyoshi (Matsukiyo) has led the consolidation of the drugstore sector over the past decade, just ahead of Aeon’s Welcia, Sugi and Cocokara Fine. This consolidation process is ongoing, but in many ways, drugstores are developing along similar lines as convenience stores – ever larger chains of small stores, with only limited diversification, each aiming for greater market share.
That’s exactly what Matsukiyo wants to achieve in the next 12 months. It remains a largely Tokyo based chain, with only limited regional penetration.
By 2015, Matsukiyo plans to have sales of around ¥600 billion, 25% higher than 2013. Now, rather than expand organically or through tie-ups with buying affiliates, the company is openly looking to acquire – and it is in a hurry, aiming to have sales of at least ¥30 billion in each of the seven regions, but clearly will be hoping for more.
Matsukiyo has also attempted to diversify out of the pseudo-discount format it uses in the capital, althought that remains its core. It is planning better logistics to back up expansion of e-commerce too. Its fledgling online channel aims to introduce next day delivery for branded products and over the counter medicines in coming months.
Arguably, where Matsukiyo is relatively weak is in the lower volume, high margin business of prescription sales. The higher profits available from prescription drugs have led most of its rivals to concentrate more on this area. Some have considerable backing. Ain Pharmaciez is now partly owned by Seven & I and is one of the country’s strongest prescription service chains. 2014 will see expansion of drug and convenience store hybrids from this partnership, particularly in Tokyo. Matsukiyo has plenty of incentive to speed up expansion across the country as a result.
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