High Inflation and Reopening Benefits 'Ttokttok'... CU and GS25 Performance Surged

BGF Retail, Operating Profit 70.8 Billion KRW... Up 20.6%
GS25, Sales 1.9532 Trillion KRW... Up 7.6%

Convenience store CU is selling lunch boxes to office workers.

[Asia Economy Reporter Lim Chun-han] Recently, convenience stores have continued their performance growth in the second quarter, benefiting from high inflation and the reopening of economic activities.

According to the electronic disclosure system of the Financial Supervisory Service on the 10th, BGF Retail, which operates CU, recorded sales of 1.9186 trillion KRW in the second quarter, a 12.8% increase compared to the same period last year. Operating profit rose 20.6% to 70.8 billion KRW, and net profit increased 22.6% to 57.4 billion KRW. A BGF Retail official explained, "In line with the reopening, we actively launched new and seasonal products, and despite the recent inflationary phase, we responded proactively by planning ultra-low-price products, which enhanced customer attraction and drove sales growth."

GS25's second-quarter sales reached 1.9532 trillion KRW, up 7.6% year-on-year, with operating profit increasing by 600 million KRW to 66.9 billion KRW. GS Retail stated that sales growth was driven by recovery in daily sales at existing stores and an increase in new stores. However, investments in information technology (IT) for future growth, such as Wine25 Plus and GS Pay, along with increased marketing expenses, slowed the growth in operating profit.

Currently, convenience stores are focusing on expanding ultra-low-price private brands (PB) to keep pace with the high inflation era. This strategy aims to solidify the demand for convenience store shopping that expanded after the COVID-19 pandemic. CU operates 10 types of the 'Deuktem Series,' while GS25 is continuously expanding its 'Silsok Pick Series.'

They are also accelerating the transition to future-oriented convenience stores. CU has commercialized drone delivery in partnership with Yeongwol-gun, Gangwon-do. The delivery area is the Oasis Glamping site, located about 3.6 km from the store. When customers order products through Yeongworld, a drone-exclusive delivery application, the store transfers the items to the drone takeoff site, and the drone flies to the final destination based on a geographic information system (GIS) to complete the delivery.