CU, 'Natuur' Discount Boosts Sales 10x
Mom Cafes & Smashumer Communities Spread Word
GS25 Launches First Frozen Delivery Service
Competition to Attract Famous Overseas Brands Including US
[Asia Economy Reporter Cha Min-young] Joo Myung-hee (36, pseudonym), a housewife living in Nowon-gu, visited about four nearby CU convenience stores early last week. She had heard about the 2+1 discount on the premium pint ice cream 'Natuur' through a local community. Since the outbreak of COVID-19, as family time increased, she has also become a frequent buyer of pint ice cream.
According to CU convenience store on the 21st, sales of four types of 'Natuur' pint ice cream from the 1st to the 12th increased tenfold compared to the previous year. It also surged 8.4 times compared to the previous month. This was thanks to word of mouth in online communities such as local mom cafes and smart consumers aiming for high-efficiency consumption, following the 2+1 discount event conducted with Samsung Card for the summer. Although the event was originally planned for the entire month of July, all stock was sold out early. The head office bore the marketing and promotional costs, reducing the burden on franchise owners. Consumer demand for premium ice cream was clear.
In the case of GS25, they have strengthened their premium ice cream service through ice cream delivery. They introduced a delivery service utilizing a frozen delivery system built over the past three months. By using the delivery applications 'Yogiyo' or 'KakaoTalk Order' on a smartphone, customers can have ice cream delivered within an hour from about 1,000 delivery-enabled stores. Currently, nine types are available, including five types of 'Ben & Jerry's' and four types of private brand (PB) shaved ice.
Competition to attract overseas brands is also fierce. CU newly introduced two types of the US premium gelato ice cream 'Talenti' and two types of low-calorie ice cream 'MooMooFarm' earlier this month. GS25, after being the first to bring in the world's number one pint ice cream 'Ben & Jerry's' in August last year, is exclusively selling it in the convenience store industry. They are also expanding their lineup with 'Halo Top,' 'Mars,' 'Twix,' and 'M&M' ice creams. Seven Eleven sells Belgian brand 'Godiva' and US brand 'Bassetts' as well. They also offer differentiated dessert soft cones as brand collaboration products.
The expansion of the premium ice cream market in the convenience store industry is to survive in the fiercely price-competitive frozen dessert market. Competition with price-destroying ice cream specialty stores, which recur every summer peak season, is inevitable. Especially, unmanned stores that have lowered startup costs to around 5 million won due to recession-type startup demand have increased significantly. They stimulate startup demand by reducing labor costs amid rising minimum wages. In fact, the ice cream discount store 'Pick Me Pick Me Ice' recently opened its 200th store. In a large online community of convenience store owners, one owner, Mr. A, lamented, "There is a tendency to open discount stores only next to high-sales convenience stores," adding, "Ice cream sales drop by 30-40% during the summer season."
The convenience store headquarters are also struggling to devise business countermeasures for stores experiencing significant sales impacts. Operation Field Counselors (OFCs), who manage regional sales of the convenience store business division, are consulting with store owners to devise sales activation strategies. Lim Min-jae, head of sales planning at BGF Retail, said, "Recently, the boundaries between various retail formats have already broken down, leading to fierce competition. The headquarters is continuously developing and implementing various support measures for franchise owners."
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