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Photo = Yonhap news |
[Alpha Biz= Paul Lee] In the first quarter of 2024 (January to March), sales at South Korean convenience stores fell by 0.4% compared to the same period last year—the first quarterly decline since related statistics were first compiled in Q2 2013. The drop raises concerns that even the once-stable convenience store sector is beginning to feel the effects of a domestic economic slowdown.
According to the Ministry of Trade, Industry and Energy’s Retail Industry Sales Trends report released on May 11, convenience store sales growth has steadily decelerated over recent years—dropping from 10.8% in 2022 to 6.1% in 2023, then to 3.7%, and now turning negative at -0.4% in Q1 2024. The number of purchases at convenience stores also declined throughout the quarter. Notably, in February, all product categories—including food, daily goods, miscellaneous items, and tobacco—saw decreased sales.
Operating profits at the two leading convenience store chains, GS25 and CU, also saw sharp declines in Q1. GS25’s revenue rose 2.2% year-over-year, but operating profit dropped by 34.6%. CU’s operator, BGF Retail, posted a 3.2% increase in sales but a 30.7% decrease in operating profit.
An industry official stated, “Unstable domestic and international conditions, continued weakness in domestic demand, and major negative events such as wildfires and aircraft accidents have all had an impact.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
