GS Retail Posts 14% Operating Profit Rise Last Year...Convenience Store Streamlining Leads to First-Ever Store Count Decline

Efficiency gains in core businesses drive record-high revenue
Still falls short of market expectations
BGF Retail also expected to see slight decline in operating profit
Four major convenience store chains cut 1,586 stores last year from previous year
First annual decline since convenience stores were introduced in Korea in 1988

GS Retail achieved a modest improvement in profitability last year by strengthening the fundamentals of its core businesses. However, as the convenience store industry has begun reducing the number of stores in response to sluggish domestic demand, projections suggest that the overall business performance of the sector will fall short of market expectations.

GS25 store. Provided by GS Retail

GS Retail announced in a regulatory filing on the 4th that, on a consolidated basis, its operating profit for last year was provisionally estimated at 292.1 billion won, up 14.1% from a year earlier. Revenue increased 3.3% to 11.9574 trillion won. Although annual revenue hit an all-time high, operating profit came in slightly below securities firms' previous consensus estimate of 295.2 billion won.

In the fourth quarter of last year, GS Retail posted revenue of 3.026 trillion won, up 3.5% year-on-year, and operating profit of 53.3 billion won, up 68.5%. By business segment, GS Shop (home shopping) generated revenue of 278 billion won and operating profit of 33.7 billion won. These figures represent increases of 10.5% and 18.2%, respectively, compared with the same period a year earlier.

During the same period, revenue from GS25, the flagship convenience store chain, rose 2.5% to 2.2531 trillion won, but operating profit fell 18.7% to 24.8 billion won. GS The Fresh, the supermarket (SSM) chain, recorded revenue of 440.4 billion won, up 7.5%, and operating profit of 4.7 billion won, up 291.7%.

In addition, development businesses such as real estate investment and tenant selection for offline shopping malls saw revenue grow 11.4% to 8.9 billion won, driven by a recovery in operating sites. Operating profit remained in the red at minus 5 billion won, but the loss was reduced by 18 billion won compared with the same period a year earlier.

A GS Retail representative said, "Thanks to the balanced growth of our core businesses in convenience stores, supermarkets, and home shopping, as well as the streamlining of our business structure, we achieved record-high annual revenue last year," adding, "We also carried out management restructuring to strengthen the fundamentals of our distribution business by winding down low-profit, non-core operations."

GS Retail stated, "Convenience stores and supermarkets, our main businesses, continued to deliver solid results and drove revenue growth," and added, "We also boldly exited other non-core businesses, achieving a turnaround in profitability." Earlier, the company restructured its business portfolio by selling its stake in the pet supplies platform About Pet and winding down overseas subsidiaries and certain inefficient operations.

BGF Retail, which together with GS Retail forms the two major players in the convenience store sector, is also expected to see a slight increase in revenue but a decline in operating profit. Securities firms estimate that BGF Retail's operating profit for last year was 247.5 billion won, down 1.6% from a year earlier, while revenue rose 4.3% to 9.0689 trillion won.

This is seen as the result of the convenience store industry shifting away from expanding its footprint and instead pursuing efficiency by reducing the number of stores while enlarging store formats in key commercial areas. According to the "2025 Annual Sales Trends of Major Retailers" recently released by the Ministry of Trade, Industry and Energy, the number of stores operated by the four major domestic convenience store chains (GS25, CU, 7-Eleven, and Emart24) stood at 53,266 at the end of last year, down 1,586 from 54,852 a year earlier. This is the first time since convenience stores were first introduced in Korea in 1988 that the annual store count has turned to a decline.

This content was produced with the assistance of AI translation services.