Shinsegae to spend 300 bln won in loss-making convenience store business

SEOUL, July 13 (Yonhap) -- Retail giant Shinsegae said Thursday it will invest 300 billion won (US$263 million) over the next three years to help its loss-making convenience store business cope with the rapidly growing market.

Shinsegae, which tapped into the convenience store market in 2014 with an acquisition, has been suffering from losses as a relative newcomer in the crowded industry, which first emerged in the country in the 1980s.

Shinsegae said it will change the name of its convenience store brand from Withme to emart24 to attract more customers familiar with the country's largest discount chain E-Mart operated by the retailer.

"The investment will be for building more distribution centers and developing new operating systems for the next generation," Kim Song-yong, chief of the Withme operator, said during a press conference held in Seoul.

The convenience store operator aims to run 2,700 stores and reach 700 billion won in sales this year, nearly double from the 378.3 billion won recorded last year. It currently runs 2,174 stores nationwide.

The market size for convenience stores in South Korea, meanwhile, surpassed 20 trillion won last year, up 18.6 percent from 17.2 trillion won the previous year, according to industry data.

Fast growth of single-person households and an aging society led to rising demand for quick foods and daily necessities that are best found at convenience stores.

scaaet@yna.co.kr
(END)