Convenience Store Next to Convenience Store... Headquarters Laughs, Store Owners Cry

Evolution of Food and Lifestyle Comprehensive Platform
Per Capita Purchase Price Increased but
Sales per Store Down Compared to 5 Years Ago

[Asia Economy Reporter Lim Chun-han] Although convenience stores have experienced a "second heyday" since the COVID-19 pandemic, sales per store have actually decreased. This is due to the rapid growth of the domestic convenience store market driven by an increase in single-person households and strengthened product competitiveness, alongside a sharp rise in the number of stores.

According to the Ministry of Trade, Industry and Energy and industry sources on the 25th, the sales per convenience store stood at 43,571,000 KRW as of February this year, which is lower than five years ago. Previously, sales per store were 43,960,000 KRW in February 2018, 43,800,000 KRW in 2019, 44,450,000 KRW in 2020, and 42,910,000 KRW in 2021. This is interpreted as intensified competition among stores due to oversaturation despite the overall growth trend of convenience stores.

In fact, the number of convenience store outlets was recorded at 42,672 during the same period, an increase of 8,207 from 34,465 five years ago. An industry insider explained, "Although the domestic convenience store market is said to be saturated, new convenience stores are emerging mainly in areas where old downtown commercial districts are redeveloped and apartments are built," adding, "Existing small supermarkets are also converting into convenience stores, increasing the number of outlets."

Both food and non-food categories are experiencing rapid growth in convenience stores. In particular, the convenience store shopping trend has firmly taken root, replacing demand for shopping at large supermarkets. This is because convenience stores have enhanced their product and price competitiveness by leveraging their advantage as the closest distribution channel to consumers. At CU, vegetable sales increased by 16.9%, fruit by 15.5%, side dishes by 17.0%, and grains by 20.9% in the first quarter of this year compared to the previous year. At GS25, vegetable sales grew by 39.9%, fruit by 47.7%, livestock products by 54.4%, and seafood by 50%. Convenience stores are also expanding their scope with various lifestyle services such as parcel delivery, financial services, laundry services, unmanned multifunction device services, and civil document printing services.

As convenience stores evolve into comprehensive lifestyle platforms, the average purchase amount per person has also increased significantly. It was 5,797 KRW in February 2018, 5,858 KRW in 2019, 6,171 KRW in 2020, 6,902 KRW in 2021, and 7,428 KRW in 2022, marking a 28.1% increase over the past five years. This means that consumers bought goods worth 7,428 KRW each time they visited a convenience store. With the rise in average purchase amount per person, total convenience store sales also increased by 6.8% last year.

Ultimately, concerns are raised that franchise owners' profits are shrinking while convenience store headquarters are growing alone. Professor Eun-hee Lee of Inha University's Department of Consumer Studies said, "The reason for the decline in sales per store is that as the number of stores increased, the number of users per store decreased," advising, "When headquarters open new stores, measures based on franchise profit data are needed to prevent damage to existing stores."

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