BGF Retail, the operator of convenience store chain CU, beat market expectations in the second quarter despite a nationwide freight workers' strike.
According to preliminary consolidated earnings disclosed Thursday, BGF Retail posted second-quarter sales of 2.43 trillion won ($1.7 billion), up 6 percent from the same period a year earlier. Operating profit rose 22.3 percent on-year to 84.9 billion won.
For the first half of the year, sales reached 4.55 trillion won and operating profit came in at 123 billion won, up 5.6 percent and 33.7 percent, respectively, from a year earlier.
BGF Retail was unable to operate normally for about a month after a nationwide freight workers' strike in April disrupted logistics, and the company also bore the cost of compensating affected store owners. Despite those headwinds, an earlier-than-usual summer heat wave, the effect of high-cost victim support funds and a rise in foreign tourist arrivals appear to have driven growth.
"Increased demand for high-margin summer products such as beverages and ice cream, the popularity of differentiated products including the crack-and-eat dessert series and PBICK The Kitchen ready meals, and daily-essentials promotions tied to the high-cost victim support fund all contributed to overall sales growth," the company said. BGF Retail added that the share of tobacco in its sales mix declined while food and processed food categories expanded, improving the average product profit margin and advancing a structural upgrade of its product mix.
The expansion of grocery-focused stores catering to one- and two-person households, along with the opening of smart grocery outlets to strengthen its role as a neighborhood shopping platform, also proved effective. "Tailored strategies based on customer segmentation — including tourism-product specialty stores targeting inbound foreign visitors and stores carrying overseas ingredients for foreign residents in Korea — diversified foot traffic," the company said.
soho0902@heraldcorp.com
