Convenience stores show explosive growth in 2015

Convenience stores posted strong sales growth last year on the rising popularity of ready-made meals and various items with single-person households, outpacing other retailers grappling with dull domestic consumption, industry data showed Monday.

The combined sales of offline retailers in South Korea tallied at 276.91 trillion won (US$229.23 billion) last year, up 3.4 percent from a year earlier, according to the data from Statistics Korea.

Sales at convenience stores jumped 29.6 percent on-year to 16.52 trillion won last year, thanks to the popularity of convenient meals prepared away from home and increased margins from cigarette price rises.

The stores, which sell food and daily necessities in smaller quantities and stay open 24 hours, have emerged as a key retail outlet in the country, becoming the fastest-growing sales channel in an era of low growth.

Local convenience stores have also competitively introduced their own store brands, known in the country as "private brands," which have an edge over traditional and multinational labels in terms of price and cost.

"Convenience stores have fast grown in line with rising single households, offering various ready-made meals and private brand products," said Kim Sook-kyung, a researcher at the Korea Institute for Industrial Economics & Trade.

In contrast, sales at department stores inched down 0.4 percent on-year to 29.22 trillion won, falling for two consecutive years, data showed.

Sales at department stores tumbled 11.9 percent in June following the Middle East Respiratory Syndrome (MERS) outbreak the previous month, but they bounced back 11.4 percent in October thanks to massive discount events supported by the government.

Discount chains and supermarkets also grappled with stagnant growth during the rising popularity of online shopping that expanded market share in fresh food items with fast-delivery services. (Yonhap)