Overall Sales Increased but Sales Per Store Declined... Convenience Store Overexpansion Continues

July Sales Growth Rate 6.6%... Offline Stores Ranked No.1
Sales Per Store Declines Despite Overall Sales Increase
Store Competitiveness Must Be Strengthened Through Regional Characteristics Enhancement

Among offline distribution companies, the convenience store industry has been experiencing continuous "success," but individual store sales have actually been declining. Despite the industry's boom driven by the increase in single-person households and the meal kit craze, competition among stores has intensified due to oversaturation of store openings. Experts advise that headquarters should strengthen the autonomy of individual stores and launch specialized services for each store to enhance their competitiveness.

Store owners are inspecting food safety at GS25 stores.
[Photo by GS25]

According to the "July Major Retailers Sales Trends" announced by the Ministry of Trade, Industry and Energy on the 2nd, the sales per individual convenience store were 55.31 million KRW, a 0.1% decrease compared to the same period last year (55.31 million KRW). This decline is more pronounced compared to other offline retailers such as large supermarkets (4.3%), department stores (2.1%), and SSMs (2.0%). The sales growth rate per convenience store has been either negative or slowing down since January of this year.

This contrasts with the unprecedented boom in the domestic convenience store industry. Due to the increase in single-person households, the trend of nearby consumption, and preference for ready-to-eat foods, total sales of convenience stores in Korea have been hitting record highs every year. In fact, last month, the overall convenience store sales growth rate recorded 6.6%, the highest among all offline retailers. The sales composition ratio by business type was the only one to increase. While the sales shares of large supermarkets (-0.4 percentage points), department stores (-0.7 percentage points), and SSMs (-0.1 percentage points) all declined, the share of convenience stores (0.2 percentage points) slightly increased.

Experts point to the problem of oversaturation of store openings as the reason why the domestic convenience store industry and individual stores are having "different dreams." In recent years, domestic convenience stores have achieved remarkable external growth to the extent of being called a "convenience store kingdom," but as many stores have sprung up like mushrooms, competition among stores has become fierce. In fact, as of July, the number of convenience stores nationwide (CU, GS25, Seven Eleven, Emart24) reached 47,542, and the industry widely predicts that it will surpass 50,000 within the year. When the number exceeded 40,000 in 2021, there were already complaints on the ground about limits, but the number of convenience stores increased by nearly 10,000 in two years.

Experts say that strengthening services tailored to regional characteristics and expanding store owners' autonomy are necessary to enhance the competitiveness of individual stores. Dr. Sujin Lee, a professor of Consumer Studies at Seoul National University, said, "Although the domestic convenience store industry has repeatedly achieved external growth, if the oversaturation problem continues as it is, the future of the domestic convenience store industry cannot be guaranteed. Of course, structural solutions need to be prepared, but immediately, at the individual store level, it is necessary to seek breakthroughs by stocking products specialized for local characteristics and launching specialized services. Headquarters also need to look overseas to find new growth engines."

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