Your little corner store is growing
Convenience stores are growing in size to offer a greater variety of products and services – and to attract more customers.
But for supermarkets, downsizing is essential.
In March, a 7-Eleven near Korea Tourism University in Icheon, Gyeonggi has doubled in size from a 25 pyeong (889 square feet) store to 50 pyeong, taking over the neighboring store.
The additional space was used for 11 additional sets of displays, but also for 20 people. It now offers fried chicken and udon prepared via instant cookers, as well as non-food services such as scanning, copying and faxing from a copier..
The branch used to make 2.6 million won ($ 2,306) per day in average revenue. After the renovation, that figure rose to 4.65 million won.
“I wasn’t sure if the store expansion would help increase sales,” said Noh Sung-min, franchisee of the branch. “We are extremely busy because increasing sales means more work. But I really appreciate the hard work.
7-Eleven expanded 40 branches in the first quarter. In total, some 600 branches have grown over the years. The average size of 7-Eleven branches is 17 pyeong, but the stores that have grown are on average 27 pyeong. Daily sales always increase after expansions.
“Convenience stores are limited to selling a number of products and services when the room is small,” said a spokesperson for 7-Eleven. “Department stores provide more space, help stores deliver the services customers want, and help increase sales.”
The chain is also adding more Food Dream stores, an even larger branch that sells specialty food items like hot dogs, fish cakes and sikhye, a traditional Korean rice drink.
CU launched a CU Jump Up project in March, which helps franchisees expand their space. Emart24 has reserve stores, premium versions of its convenience stores. Reserve branches have larger food courts designed to look like cafes. They carry groceries and a larger selection of wines and liquors. Some even sell accessories for Apple devices. Emart24 Reserve stores generate 51% more sales than regular stores.
As convenience stores expand, supermarkets are finding that less can be more. Many are downsizing their Inventory Management Unit (SKU), an industry definition of the number of products transported by a store. Much of it is just ditching items that aren’t selling well. Lotte Mart averaged 15,000 types of products per store last year, down 51% from 2019. Designer clothes that don’t sell well and low-end cosmetics are often pulled from the shelves. There are 605 low-end cosmetic stores renting space at Lotte Mart branches.
Dropping products gives supermarkets empty space. Some are occupied by new tenants offering a range of services or activities, including screen golf arcades and indoor playgrounds. Korea Medical Institute’s Suwon Center is located on the first floor of Gwonseon branch of Lotte Mart, Suwon, Gyeonggi. A 165 pyeong golf practice hall, Bravo Public Screen Golf, has opened in the Cheoncheon branch of Lotte Mart, also in Suwon, Gyeonggi. With an increasing number of animal lovers in Korea, Lotte Mart plans to add animal related shops to branches.
“Opening stores that attract customers is crucial for supermarkets,” said Nam Chang-woo, a leader of Lotte Mart’s tenant development team. “We plan to host entertainment-oriented venues such as indoor sports complexes and cafes for children.”
BY LEE SOO-KI [[email protected]]