Convenience stores expanding into fresh produce and foreign delicacies

Industry

Published: 06 Feb. 2024, 16:57 Updated: 06 Feb. 2024, 19:00

Convenience stores expanding into fresh produce and foreign delicacies

A woman holds a bucket filled with domestically produced strawberries at a 7-Eleven convenience store. [7-ELEVEN]

If you crave fresh strawberries or Japanese desserts, look no further than the nearest convenience store.

Convenience stores in Korea are widening their product portfolio from ready-to-eat food and sodas to locally sourced fresh fruits and exotic delicacies. They are even joining forces with local governments to bring their locally produced food to consumers.

Korea Seven, a 7-Eleven operator, has been selling packages of garlic produced in North Gyeongsang and onions from South Jeolla. The products are based on the corporate project dubbed “Monthly Farming,” aiming to encourage customers to buy domestic crops. The company features a total of 60 regional specialties supplied from 29 regions nationwide.

“With the growing demand of such local specialties, sales of fresh foods garnered a 20 percent increase last year compared to 2022,” an official from 7-Eleven said. “Particularly, sales of fruits and vegetables hiked by 30 percent in the same period.”

Convenience stores have become a channel of distribution and sales for small-sized farms.

Farms and orchards struggling with low brand awareness or unstable yields usually face difficulties in becoming suppliers for large wholesalers or department stores. For them, convenience stores’ new marketing strategies have become a lifeline.

CU, a convenience store chain managed by BGF retail, has offered delicacies using locally cultivated ingredients such as garlic produced in Changnyeong County, South Gyeongsang and green onion from Jindo, South Jeolla. The company labels the products with the regions’ names.

“The product contributed to boosting the people’s recognition toward our locality and also improved the county’s reputation,” an official from Jindo County said. “The county anticipates that it could empower people’s trust in other products like seaweed.”

A woman holds a Japanese-imported ″Hokkaido Pudding″ at a GS25 convenience store. [GS25]

Convenience stores are also on the hunt to secure unique foreign products to differentiate themselves from rivals.

GS Retail, the operator of GS25, is planning to bring in some 50 foreign-sourced products from more than 30 countries. Its convenience store chain, GS25, launched the sales of the Japanese delicacy “Hokkaido Pudding” last November. Within two months, more than 100,000 puddings were sold.

CU sells a liter-sized packet of milk manufactured by a Polish dairy company, Mlekovita. The price of the milk costs around half of the milk produced in Korea.

Emart24 is expanding its catalog by introducing food products from Malaysia, France and New Zealand.

“Internationally sourced products are gaining traction from young consumers aged between 10 and 30 because they can enjoy the snacks and delicacies they tasted while traveling abroad,” an official from Emart24 said.

The sales of convenience stores surpassed that of large retailers in 2021.

According to the Ministry of the Interior and Safety on Sunday, there are more than 9.93 million single-person households in Korea, accounting for 42 percent of all households in the country.

Those in their 20s and 30s living alone are the main customers of convenience stores.

They prefer convenience stores over wholesalers because the products available at the convenience stores come in portions and sizes tailored to single-person households. As such, the Korean convenience store industry is targeting them.

According to the Ministry of Trade, Industry and Energy, department stores accounted for 17.4 percent of sales across the whole retail sector. Convenience stores were close behind, taking up 16.7 percent and large retail stores like E-mart took up 12.7 percent.

The convenience store industry witnessed the biggest increase in yearly sales, with an 8.1 percent rise. Department stores and large retailers had 2.2 percent and 0.5 percent increases, respectively.

“If the trend continues, convenience stores can dethrone the department stores and garner the largest profit in the offline commerce and retail sector,” an official from the retail industry said.

“The increase of single-person households strengthened the foothold of convenience stores presenting better affordability and accessibility [than other shopping channels].”

BY KIM KYOUNG-MI [lee.soojung1@joongang.co.kr]