Convenience Stores See First-Ever Decline in Store Numbers... Struggling to Survive by Raising Average Transaction Value

Average Spend per Customer Rises After COVID-19
Korea Surpasses Japan, the 'Convenience Store Powerhouse'
Online Orders Surge Through Quick Commerce
Multi-Purchase Driven by Specialized Stores and Differentiated Products
Focus on Efficiency, Strengthening Strategies to Increase Basket Size

A convenience store in downtown Seoul. Photo by Yonhap News Agency

The average transaction value per customer, also known as the average spend per purchase, has been steadily rising in the domestic convenience store industry. Amid a drop in the number of stores—marking the first decline due to market saturation and the impact of domestic economic stagnation—convenience store chains are striving to boost sales, which are the foundation for improved profitability, by diversifying delivery services and product selections.

According to the Ministry of Trade, Industry and Energy and related industry sources on March 5, the average transaction value for the four major domestic convenience store chains stood at 7,354 won as of December last year, up about 5% from 7,009 won in 2021. Until 2019, before the COVID-19 pandemic, the average transaction value was in the 5,000 won range. As the pandemic drove more people to use convenience stores for their accessibility, the figure jumped to 6,895 won the following year, later surpassing the 7,000 won threshold and continuing to grow annually. As of January this year, the average transaction value reached 7,593 won.

The average transaction value, calculated by dividing the total sales of the four major convenience store chains by the total number of purchases, reflects the average amount spent per person. Last year, the combined sales of these four chains grew by just 0.1%. Given that the number of transactions has been declining each month, the rise in average transaction value was inevitable.

However, the industry believes that, even taking into account the rising prices of goods, the increase in average transaction value was driven by actual purchases by customers, which ultimately boosted sales. GS Retail and BGF Retail, considered the industry’s two leading players, leveraged this trend to achieve record-high sales last year—11.96 trillion won and 9.06 trillion won, respectively.

It is also notable that, during the same period, Korea’s average convenience store transaction value surpassed that of Japan, which is known as a convenience store powerhouse. According to the Japan Franchise Association, after applying the average annual exchange rate for the yen, Japan’s average convenience store transaction value was 7,555 won in 2021 but fluctuated year to year, dropping to 7,306 won last year—lower than in Korea.

The number of convenience stores in Korea was tallied at 53,266 last year, a decrease of 1,586 stores from the previous year. This marks the first decline in store numbers in 36 years, since the opening of the first store in 1988. The four major convenience store operators—CU, GS25, 7-Eleven, and Emart24—have reduced their store counts and shifted toward operating only high-performing locations after concluding that the market had reached saturation relative to the population.

The domestic convenience store industry attributes the rise in average transaction value to operating strategies that span both online and offline channels. A prime example is the quick commerce service, which delivers products ordered from a nearby convenience store to a customer’s home or workplace within an hour via various delivery platforms. To use this service, customers must meet a minimum order amount of around 15,000 won, prompting them to add daily necessities, office supplies, or higher-priced items to their carts. This minimum order value is more than double last year’s average transaction value.

As a result, major convenience store companies are focusing on expanding quick commerce services and increasing usage rates. CU, operated by BGF Retail, was the first in the industry to launch such a service in 2019. It now partners with more than 10 online platforms and offers the service at approximately 10,000 stores nationwide. From January to November last year, delivery sales jumped 49.8% compared to the same period the previous year.

GS25, operated by GS Retail, also saw its quick commerce sales grow 64.3% year-on-year last year. 7-Eleven, operated by Korea Seven, recorded a twofold increase in monthly active users (MAU) in December 2023 compared to the same month the previous year.

Other strategies include maintaining strong sales of traditional convenience store favorites such as cigarettes, liquor, and ready-to-eat meals, while also introducing new or experiential items to encourage additional purchases. CU recently opened a signature store in Yeouido Hangang Park with a "Running Station" concept, targeting the growing running population. The store is equipped with lockers, changing rooms, and powder rooms, as well as dedicated merchandise and experience spaces for running clubs. Additionally, each store offers value-for-money private label (PB) coffee paired with matching food items as a set, encouraging customers to make multiple purchases.

GS25 is focusing on new growth product lines such as beauty, health supplements, and apparel. By collaborating with leading skincare brands, GS25 sold over 50 related products in the 3,000 won range, leading to a thirteenfold year-on-year increase in sales of these categories as of December last year. The company also introduced small-portion health supplements priced under 5,000 won for single-person households in August last year, surpassing cumulative sales of 1 million units in just four months. Since March last year, GS25 has been the exclusive operator of the "Musinsa Standard Express" apparel line at about 10,000 stores nationwide, with apparel sales in these stores exceeding those at non-participating stores by over 30%.

The convenience store industry plans to continue optimizing operations by reducing store numbers while simultaneously pursuing strategies to further raise average transaction values. An industry official commented, "While increasing both foot traffic and average transaction value is ideal, even if customers each purchase multiple items, it can achieve the same effect," adding, "We plan to focus on increasing basket size without reducing sales of existing product categories."

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