South Korea's two largest convenience store chains notched record quarterly revenue in the first quarter, prioritizing profitability over expansion amid high inflation.
BGF Retail, the operator of CU, reported revenue of 2.12 trillion won ($1.44 billion), up 5.2 percent from a year earlier, while operating profit surged 68.6 percent to 38.1 billion won.
The company credited popular exclusive products and leaner store operations for the outperformance, pointing in particular to private label and dessert items such as Dubai-style chewy cookies and butter rice cakes, alongside affordable meal options.
CU has continued rolling out specialty stores, albeit more selectively, targeting high-traffic areas with concepts focused on running, ramyeon and desserts for younger shoppers and foreign visitors.
A trucking union strike last month, however, could dent that momentum, industry officials said, warning of pressure on both revenue and margins that may spill into second-quarter earnings.
BGF Retail recently announced compensation measures of up to 1 million won per store for inventory shortages and disposal losses tied to the disruption.
GS25 saw revenue climb 3.7 percent to 2.09 trillion won, while operating profit rose 23.8 percent to 21.3 billion won, as the chain pressed ahead with a strategy of closing underperforming outlets and relocating others to premium commercial areas.
GS25 also leaned on exclusive merchandise and pop culture collaborations, including tie-ins with chefs from Netflix's "Culinary Class Wars." Fresh-food-focused stores, numbering 836 as of the first quarter, generated daily sales roughly 1.6 times higher than standard outlets.
Foreign tourists provided another boost, with sales to overseas visitors jumping 73 percent from a year earlier.
With both chains now eyeing the next leg of growth, attention is turning to content.
"The new challenge is turning convenience stores into unique retail platforms that combine artificial intelligence and content," one industry official said.
minmin@heraldcorp.com
