From Martial Law Blues to BTS Boost: Convenience Store Leaders Report Strong Q1 Results

BGF Retail's Operating Profit Up 68.6% Year-on-Year

GS Retail Also Sees 39.4% Growth

Business Structure Improved Through High-Quality and Specialized Stores

Rising Sales from Foreign Tourists Visiting Korea

Summer Peak Season a

Due to the aftermath of the 12·3 Martial Law, which resulted in an earnings shock for the two leading players in the convenience store industry in the first quarter of last year, both companies have received significantly improved profitability results this year. Instead of competing to expand the number of stores, their strategy focused on restructuring by prioritizing high-quality and specialized stores proved effective. The increase in foreign tourist sales driven by heightened interest in BTS's comeback performance and travel to Korea also contributed to the rebound in performance.

BGF Retail, which operates the convenience store brand CU, announced on May 7 that its consolidated operating profit for the first quarter of this year was provisionally tallied at KRW 38.1 billion, a 68.6% increase from the same period last year. Revenue grew by 5.2% to KRW 2.1204 trillion, and net profit surged by 118.7% to KRW 29.3 billion.

Visitors are purchasing products at a CU store near Gwanghwamun ahead of BTS's comeback performance. Provided by BGF Retail

BGF Retail explained, "Favorable weather conditions such as early cherry blossom blooming and rising average temperatures led to an increase in outdoor activities, creating a synergy that boosted our performance." In addition, the company quickly introduced a dessert lineup reflecting current trends—such as Dubai Jjondeuk Cookie, Butter Tteok, and Fruit Sand—leading the convenience store dessert market. Furthermore, value-for-money private brand (PB) products that reflect the current high inflation environment also drove sales growth, the company added.

In the first quarter of this year, sales of CU's differentiated product categories increased by 13.6% year-on-year, surpassing last year's single-digit growth trend. During the same period, sales growth at existing stores operating for over one year reached 2.7%, showing improvement compared to last year's negative growth.

The influx of foreign tourists, spurred by events such as the BTS comeback concert held at Gwanghwamun Square in March, also contributed to the turnaround in results. The number of visits by foreign customers to CU stores in the first quarter increased by 70.2% compared to the same period last year, while sales from foreign customers using overseas payment methods grew by 65.1%.

Additionally, the company analyzed that the concentrated launch of specialized stores reflecting recent trends—such as Ramen Library, Dessert Park, and Running Station—contributed to the improvement in performance.

Visitors attending BTS's comeback concert are lining up at a GS25 store near Gwanghwamun to make payments. Provided by GS Retail

GS Retail, which operates convenience stores, supermarkets (SSM), and home shopping businesses, also reported that its first-quarter operating profit increased by 39.4% year-on-year to KRW 58.3 billion. Revenue rose by 3.8% to KRW 2.8549 trillion, and net profit surged by 783.6% to KRW 42.5 billion. Of this, first-quarter sales from the GS25 convenience store business totaled KRW 2.0863 trillion, up 3.7% year-on-year, while operating profit rose 23.8% to KRW 21.3 billion.

GS25’s first-quarter sales to foreign customers also grew by 73% compared to the same period last year. This figure is based on foreign payment methods, such as Alipay and WeChat Pay.

In addition, the strategy of expanding fresh-focused stores targeting single- and two-person households by strengthening grocery items such as agricultural, livestock, and marine products, seasonings, and ready-to-eat meals also proved effective. As of the first quarter of this year, GS25 operated 836 fresh-focused stores, an increase of about 240 from the same period last year. The average daily sales of these stores were 1.6 times higher than those of regular stores.

Instead of increasing the number of stores, the company promoted a 'scrap-and-build' strategy by expanding the size of existing stores or relocating them to better locations. As a result, sales at existing stores operating for over one year rose by 4.7% year-on-year.

The convenience store industry expects this upward trend to continue in the second quarter. An industry official commented, "From the second quarter, when the hot weather begins, through the summer season, convenience stores enter their peak period, with a surge in demand for ice cups, beverages, and more." The official added, "The government's high oil price relief funds can also be used at convenience stores, which will help boost sales."

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