The supermarket GS The Fresh, operated by GS Retail(007070), has become the first in the industry to surpass 500 franchise stores.
GS Retail said on the 20th that it opened GS The Fresh Songpa Seokchon Station. As the 500th franchise of GS The Fresh, the opening raised the total number of operating stores to 603.
The Songpa Seokchon Station store opened near Songpa-daero with an exclusive area of 288㎡ (87.5 pyeong). It targets grocery shopping demand from newlyweds and family customers living in nearby dwellings.
GS The Fresh has expanded its franchise business since opening its first franchise store, Sinsa, in 2010. The company said the strategy of shifting from a headquarters-operated model to a franchise-centered structure by applying the franchise know-how of convenience store GS25 proved effective.
The chain operation system also supported stable operations at franchise stores. It standardized product assortments and had headquarters handle merchandising and ordering to reduce operators' burdens, allowing franchisees to focus on marketing and sales suited to their trade areas. In 2020, the year after full-scale adoption of chain operation, the share of franchises among all stores surpassed 50% for the first time, and it is now about 83%.
It is also expanding its quick commerce business. Along with its own application, Our Neighborhood GS app, it offers grocery delivery within one hour in connection with Baemin, Coupang Eats, Yogiyo, and Naver Shopping. In the first half of this year, GS The Fresh's quick commerce sales rose 41.9% from a year earlier. In the second quarter, quick commerce accounted for 9.9% of total sales, the highest on record.
GS The Fresh is applying trade-area analysis using a geographic information system (GIS) to new openings, and it is also optimizing product assortments and store operations based on store-by-store trade areas and customer data. From January to July this year, same-store sales increased 6.2% from a year earlier.
Kwak Yong-gu, head of the Super BU at GS Retail, said, "We are expanding the number of stores by shifting to a franchise-centered business structure and are also finding additional revenue opportunities such as quick commerce," and added, "Through AX and data-based management, we will enhance franchise competitiveness and operational efficiency and grow together with store operators."