[Alpha Biz=(Chicago) Reporter Kim Jisun] 7-Eleven and E-Mart 24 turned into deficits side by side in the first half.

Sales have increased, but operating profit has declined. Both convenience stores explained that their operating profits declined in the process of continuing investment to stabilize their businesses.

According to Lotte Holding's IR data on the 17th, Korea Seven's operating loss in the first half of this year was 27.9 billion won, which turned into a deficit from 1.4 billion won in operating profit in the same period last year. In terms of operating profit in the second quarter, the company recorded 4.4 billion won, down 51.5% from the same period last year. Sales in the first half of the year were 2.82 trillion won, up 13.1% from the same period last year. Sales in the second quarter rose 1.8 percent to 1.484 trillion won.

Seven-Eleven attributed the drop in operating profit to the increase in integrated management (PMI) costs and logistics costs following the Ministop Mergers and Acquisitions (M&A) despite the increase in sales. Since the acquisition of Ministop last year, the company has been working on integration. The burden of sales management costs such as remodeling costs and employee salaries for store conversion still remains. It also spent an additional 13.2 billion won on logistics costs in the first half of this year as logistics costs rose.

Recently, 7-Eleven saw a net decline in the number of stores. As of the end of the second quarter, the number of Seven-Eleven stores decreased by 253 compared to the previous quarter, operating 13,867 stores. Seven-Eleven is the only one among the four convenience stores that has recorded a net decline in new stores in the past three years. However, despite the reduction in the number of stores, sales per store are expanding due to investment for store efficiency.

E-Mart 24 also saw its sales increase, but it turned into a deficit. The company posted an operating loss of 500 million won in the first half of this year, down 4.4 billion won from the same period last year. Operating profit in the second quarter was 3.4 billion won, down 21% from the same period last year. Sales in the first half of the year rose 5.4 percent to 1.75 trillion won over the same period. Sales in the second quarter rose 7.2 percent to 574.4 billion won.

E-Mart 24 explains that sales of self-checkup kits have been affected by a decrease in reverse base phenomenon compared to last year and investment costs to strengthen marketing and IT to increase merchant sales. In addition, business costs are increasing at a time when investments such as logistics infrastructure expansion and unmanned stores continue. E-Mart 24 plans to continue to invest in expanding stores and promoting product competitiveness.

 

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