The convenience store industry, which had continued to contract, is estimated to have rebounded in the third quarter. Analysts said easing fixed costs due to limits on opening new stores, along with the positive effect of "consumption coupons" distributed to all citizens starting in July, worked favorably.
According to FnGuide on the 20th, GS Retail, which operates GS25, is estimated to have posted third-quarter sales of 3.1441 trillion won and operating profit of 93.1 billion won this year. Compared with the same period last year, sales rose 2.9% and operating profit increased 15.5%. BGF Retail is expected to have recorded third-quarter sales of 2.438 trillion won, up 4.8% on-year, and operating profit of 96.4 billion won, up 5.7%.
The two convenience store chains had both seen operating profit decline in the first and second quarters. GS25's second-quarter sales were 2.2257 trillion won, up 1.5% on-year, but operating profit fell 9.1% to 59 billion won. CU also saw second-quarter sales rise 4% to 2.2901 trillion won, while operating profit decreased 8.9% to 69.4 billion won.
They were not the only ones. According to the Ministry of Trade, Industry and Energy, first-quarter sales at the three convenience store operators (GS25, CU, and 7-Eleven) declined 0.4% on-year. It was the first drop in quarterly sales since statistics began in 2013. A consumer slump, unfavorable weather, and uncertainty in the business environment were cited as causes.
In response, convenience store chains that had posted net increases in store count every year moved to shore up fundamentals by controlling the pace of new openings and closing low-profit stores. According to the Ministry of Trade, Industry and Energy, the number of stores operated by the three convenience store companies in Korea (CU, GS25, and 7-Eleven) fell by 741, from 48,722 at the end of last year to 47,981 as of August this year.
Although temporary, the use of consumption coupons distributed by the government starting in July also had a positive impact on improving results. The securities industry estimated same-store sales growth in the convenience store sector in the third quarter at 2%–3%.
Cho Sang-hun, a research fellow at Shinhan Investment & Securities, said, "In the past (when disaster relief funds were paid in 2020 amid the outbreak of COVID-19), about 5% of the total support funds were used at convenience stores, but this time 9.7% was used," and added, "Same-store sales growth, which had contracted in the first half, rose to 6% in July, and maintained 2%–3% growth in August and September, with the consumption coupons serving as a priming effect."
The securities industry expects fourth-quarter operating profit at GS Retail and BGF Retail to rise 105% and 14%, respectively, from a year earlier.
Park Sang-jun, a researcher at Kiwoom Securities, said, "In the fourth quarter, with the disappearance of the consumption coupon effect, we judge that sales growth will slow compared with the third quarter," but added, "Considering the strength of the domestic stock market, the increase in foreign tourists visiting Korea, and the impact of Chuseok, a solid trend is expected to continue in the fourth quarter."