Life-style Change
It has been found that GS25, the second-largest convenience store chain in South Korea in terms of the number of stores, reached 5.6027 trillion won (US$4.8 billion) in annual sales last year, up 20.4% from a year ago, to become the first one in the local industry that exceeded 5 trillion won in annual sales. Its operating profit increased 13.1% as well and added up to 213.2 billion won (US$181 million). The annual sales and operating profit of CU, the largest convenience store chain in the country, totaled 4.94 trillion won (US$4.2 billion) and 197 billion won (US$167 million), up 12.7% year on year, during the same period, respectively. The two chains were followed by 7-Eleven, whose sales reached 3.704 trillion won (US$3.2 billion) last year with a year-on-year growth of 11.6%.
The combined sales of the three convenience store chains added up to approximately 14 trillion won (US$12 billion) last year, about 2 trillion won (US$1.7 billion) more than the combined annual sales of the three largest department store chains in the country. Such a rapid growth of the convenience stores in South Korea is directly related to an increase in the number of single-person households.
According to the Korea National Statistical Office, the ratio of single-person households in the country jumped from 15.5% to 27.1% between 2000 and 2015 and this type of households is currently the most prevalent one in South Korea. The convenience store chains have released more and more home meal replacements, small pack products and the like that can cater to such customers in view of the trend. As a result, they are enjoying such a substantial growth while department stores and supermarkets are struggling due to sluggish domestic consumption.
In the meantime, the Korean liquor called soju is supporting the local liquor industry amid the current economic recession. These days, the sales of beer and other types of liquor are on the decline as more and more people are refraining from having a get-together and soju is taking their place.
According to industry sources, Hite Jinro’s Chamisul soju brand is estimated to have exceeded 1 trillion won (US850 million) in annual sales last year for the first time in the industry. The company’s beer sales for the first three quarters of last year fell more than 60 billion won (US$51 million) year on year to 562.5 billion won (US$478 million) whereas its soju sales increased to 749.48366 billion won during the period, at least 50 billion won more than its soju sales for the previous year. Under the circumstances, the annual sales of the Chamisul soju brand is likely to have exceeded 1 trillion won last year in that the figure had already reached 975.6 billion won (US$829 million) in 2015. The company explained that the sales growth is being led by individual customers rather than barkeepers and restaurant owners.
Lotte Liquor’s Cheoeum Cheorum, the second-largest brand in the South Korean soju market, also showed some year-on-year growth in sales last year from approximately 300 billion won (US$255 million). “It seems that an increasing number of consumers are opting for soju, which is relatively inexpensive, in the current economic recession,” said an industry source.