Lotte Embracing Ministop... Solidifying the 'Big 3 Convenience Stores'

Offer of 300 Billion KRW, Likely Acquisition
Gap with CU and GS25 Narrows to 2,000 Stores
Intense Competition Expected in Franchise Recruitment

[Asia Economy Reporter Lim Chun-han] Lotte is solidifying the 'convenience store big three system' of CU, GS25, and Seven Eleven by acquiring Korea Ministop.

According to industry sources on the 18th, Samil PwC, the lead manager for the sale of Korea Ministop, is expected to announce the preferred bidder as early as this week. The main bidders for this auction included Lotte, Shinsegae, and the Nepstone Holdings consortium. Although Lotte did not participate in the preliminary bidding, it expressed its intention to acquire during the main bidding. Lotte is reported to have offered the highest acquisition price of 300 billion KRW among the bidders. The market had initially estimated the appropriate sale price of Korea Ministop to be in the 200 billion KRW range. Previously, when Korea Ministop was put up for sale in 2018, Lotte also showed strong acquisition interest, but the deal fell through after Aeon Group withdrew its decision to sell.

Lotte's acquisition of Korea Ministop is expected to intensify competition among the convenience store big three. As of the end of last year, CU and GS25 are competing for first and second place with about 15,000 stores each. The combined number of stores of Seven Eleven (11,173) and Korea Ministop (2,620) totals 13,793, which, upon completion of the acquisition, would narrow the gap with the first and second places to around 2,000 stores. The gap with the fourth-ranked Emart24 (about 5,800 stores) will also widen significantly. In the convenience store industry, the number of stores is a key indicator directly linked to economies of scale and sales.

The key issue is whether franchisees will be retained. Even if Lotte acquires Korea Ministop, franchise owners whose contracts expire may switch to competing brands. In the past, Seven Eleven expected to secure the second place in the industry by acquiring Lawson and By The Way, but the increase in the number of stores did not meet expectations. At that time, some By The Way franchisees opposed the integration process, citing unfavorable contract terms.

Therefore, it is expected that competition to attract franchisees among convenience stores will intensify this year. According to the convenience store industry, about 5,000 convenience stores, accounting for approximately 10% of all stores nationwide, are up for contract renewal. Each company is presenting the largest-ever win-win plans to attract franchise owners. CU announced a 200 billion KRW win-win plan, including increased waste support funds and new product introduction support funds, while GS25 launched an 180 billion KRW win-win plan featuring daily recovery support funds and fraud damage insurance premium support, intensifying the competition.

This content was produced with the assistance of AI translation services.