Last Year's Sales Increased by 6.2% Compared to Previous Year
Despite Challenging Business Conditions Such as Soaring Exchange Rates and Economic Recession
Growth Rate of Fixed Costs Gradually Slowed, Leading to Improved Operating Profit in Q4
BGF Retail, which operates the convenience store CU, reported that its operating profit last year decreased by 0.6% compared to the previous year. The decline in performance is interpreted to have been influenced by factors such as high exchange rates, prolonged economic recession, temperature drops, and the continuous increase in fixed costs including rent, logistics, and labor costs.
According to the Financial Supervisory Service's electronic disclosure system on the 11th, BGF Retail's operating profit last year was 251.6 billion KRW, down 0.6% from the same period the previous year. During the same period, sales amounted to 8.6988 trillion KRW, an increase of 6.2% compared to the previous year.
Operating profit in the fourth quarter of last year was 51.6 billion KRW, up 1% from the same period the previous year. Sales during the same period were 2.2165 trillion KRW, an increase of 8.6% compared to the previous year.
Despite facing a challenging business environment last year due to high inflation and sluggish domestic demand, overall sales appear to have been boosted through qualitative improvements in new stores and the discovery of new products reflecting trends. CU launched products such as fresh fruit highballs, overwhelmingly convenient meals, and Matpolli desserts, as well as ultra-low-priced products (Deuktem series, 990 series) last year, which drove sales growth. BGF Retail explained that it sought to increase sales at existing stores by diversifying product categories while improving product turnover rates.
The number of stores last year increased by 696 from the previous year to 18,458 stores, achieving the largest number of convenience stores in South Korea. The daily sales of newly opened stores this year showed a 4% increase compared to the previous year. BGF Retail plans to continue opening stores centered on high-quality new stores to achieve external growth and strengthen brand power.
Last year's operating profit decreased compared to the previous year due to overlapping adverse factors such as soaring exchange rates, prolonged economic recession, temperature drops, and the continuous increase in fixed costs including rent, logistics, and labor costs. However, although the cumulative operating profit in the first half of the year decreased compared to the previous year, the operating profit on a consolidated basis in the fourth quarter increased year-on-year due to improved performance of subsidiaries and a slowdown in the growth rate of fixed costs following the third quarter.
A BGF Retail official stated, "This year, we will continue to focus on qualitative growth management by continuously opening high-quality new stores, strengthening competitiveness through product and service differentiation, and stabilizing costs."
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