BGF Retail Reports 68.6% Increase in Q1 Operating Profit Driven by Desserts and Convenience Foods

BGF Retail, which operates the CU convenience store chain, reported a 68.6% increase in operating profit for the first quarter of this year, despite high inflation and weakened consumer sentiment. The company attributed this growth to successful product differentiation, improved store operations, and favorable weather conditions.

BGF Retail announced that its consolidated operating profit reached 38.1 billion won, up from the same period last year. Revenue also rose by 5.2% to 2.12 trillion won.

The company noted that both revenue and operating profit increased despite ongoing inflation and reduced consumer confidence due to the impact of the Middle East conflict. Favorable weather, including early cherry blossom blooms and rising average temperatures, contributed to increased outdoor activities and higher demand for convenience store services.

Product competitiveness played a key role in the results. CU quickly launched dessert items reflecting current consumer trends, such as two-toned cakes, butter rice cakes, and fruit sandwiches. The 'get morning' series targeting breakfast demand and cost-effective convenience meals also attracted consumers during this inflationary period.

The specialized store strategy enhanced growth rates for existing locations. CU expanded stores targeting specific consumer groups, such as ramen libraries, dessert parks, and running stations, which helped attract new customers. As a result, the growth rate for existing stores was 2.7% in the first quarter.

Looking ahead to the summer peak season, BGF Retail plans to expand its differentiated products in key categories, including convenience meals, desserts, and alcoholic beverages. With rising temperatures expected to boost outdoor activities, the company aims to enhance product competitiveness to maintain sales momentum.

Additionally, BGF Retail is expanding its international business. In November last year, it opened its first CU store in downtown Hawaii and plans to open 50 more locations over the next three years in tourist and commercial areas, including Waikiki Beach and Ala Moana.