Effective but... Why Expanding Flagship Convenience Stores Is Not Easy

CU Opens Second Flagship Store at Everland
Expansion Plans Exist but Concept Setting Is Challenging
GS25 Yet to Open Additional Stores After Door-to-Seongsu

The convenience store industry is reportedly struggling to expand flagship stores opened to convey each brand's identity. Although sales and customer attraction effects are clear, the branding process based on differentiated concepts is not easy. Unlike regular stores, flagship stores are designed with differentiated concepts tailored to location, commercial district, and main customers. They break the conventional notions of convenience stores and focus on branding.

The interior of 'The Magic Gate CU,' the second flagship store opened by convenience store CU at Everland in Yongin on the 13th. The concept of 'a door leading to a land of dreams and fantasy' is reflected in the store name and both the interior and exterior design.
[Photo by BGF Retail]

According to the industry on the 22nd, convenience store CU opened its flagship store 'The Magic Gate CU' at Everland in Yongin on the 13th. This is CU's second flagship store following 'K-Planet 1st Branch,' which opened in April at Seoul Olympic Plaza. The Magic Gate CU incorporates the concept of 'a gate leading to the land of dreams and fantasy' into the store name and interior and exterior design. The space design was inspired by a theme park where consumers can play with CU's own brand characters, 'CU Friends,' tailored to the location's characteristics.

The opening of The Magic Gate CU was influenced by the success of K-Planet 1st Branch. K-Planet 1st Branch featured CU's brand character 'K-Roo' opening a convenience store in its hometown, K-Planet, presenting a space design differentiated from regular stores. In the center of the store, a circular checkout counter reminiscent of a control tower and an instant cooking area were placed, and large LED screens and hologram media were installed throughout, breaking the mold of conventional convenience stores. The effect was clear. With successful customer attraction, sales increased by as much as 75% compared to the same period last year. CU drew a blueprint to create a second flagship store based on the success of K-Planet 1st Branch, and the result was this The Magic Gate CU.

However, the industry believes that CU will find it difficult to consecutively open third and fourth flagship stores. It is not easy to embed brand storytelling into stores based on differentiated interiors and products. A CU official said, "Even though there is an internal policy to expand flagship stores, it is practically impossible to plan 'how many to make by when' due to the conceptual considerations."

GS25 has also not opened a second flagship store for nearly a year since opening 'Door to Seongsu' in Seongsu-dong, Seoul, last November. Door to Seongsu is GS25's first premium flagship store under the DOOR to brand. It features a caf? concept during the day and transforms into a pub at night. The composition, focusing on PB (private brand) products excluding general merchandise, is also a differentiating factor. GS25 started preparing to open second and third Door to stores as Door to Seongsu achieved good results in sales and branding, but there has been little progress for nearly a year. A GS25 official said, "We are considering expanding Door to stores in the future," adding, "We are reviewing various options centered on locations with high rarity."

Emart24 and Seven Eleven have also not opened follow-up flagship stores after 'R Gwangalli Center Branch' and 'Food Dream 2.0 1st Branch,' respectively. An industry insider said, "Flagship stores will not be massively expanded in the future," adding, "They must have rarity and differentiated concepts, so at most one or two per year might be expected."