[Edaily Reporter Han Jeon-jin] Min Seung-bae, CEO of #BGF Retail, is making a bold move with "CU Smart Grocery," a store specializing in grocery shopping, which is set to open its first location in Seoul. This expansion into Seoul comes just one month after the first store opened in Suwon last month. Observers note that this marks the beginning of a full-scale experiment to attract local grocery shopping demand—traditionally the domain of supermarkets and grocery stores—in a convenience store industry where new store openings have stalled due to market saturation.

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According to industry sources on the 14th, BGF Retail has confirmed plans to open the second “CU Smart Grocery” store in the commercial district in front of Sogang University, near Gwangheungchang Station in Mapo-gu, Seoul. The 215-square-meter (65-pyeong) store is scheduled to open in mid-month. This marks the first time a Smart Grocery store has opened in Seoul. The first store opened last month in Suwon, Gyeonggi Province. CU is also considering expanding the number of stores to more than 10 locations nationwide, including Seoul, by the end of the year.

Smart Grocery is the first grocery-specialized store CU has launched under a separate brand. While existing grocery-specialized stores focused primarily on primary fresh foods such as fruits and vegetables, Smart Grocery is characterized by an expanded product range that includes small-packaged, storable ingredients such as sauces and frozen meats, with an emphasis on room-temperature and frozen items. In particular, it maximizes shopping convenience by separating the “quick aisle” for purchasing core convenience store items from the “shopping aisle” for browsing grocery items.

The Seoul store takes this concept a step further than the Suwon location, clearly reflecting CEO Min’s strategy to position convenience stores as a local grocery shopping channel. Earlier, at the shareholders’ meeting in March, CEO Min outlined his vision to expand the customer base to include women, seniors, and foreigners, and to develop large urban stores as hubs for online and delivery services. This is seen as a reflection of CEO Min’s vision that convenience stores must evolve from a channel centered on men in their 30s to 60s into a lifestyle platform that caters to single- and two-person households, the elderly, and even women in their 40s and 50s.

The initial results of the Suwon store, which opened last month, are also becoming visible. According to CU, food sales at this store have ranked in the top 1% nationwide since its opening. The proportion of food sales also stands at about 20%, which is 10 times that of a typical store (about 2%). A CU official stated, “We are pushing forward with the opening of Smart Grocery stores, focusing on commercial districts with high demand for local grocery shopping,” adding, “We will expand the scale of store openings while considering operational efficiency.”

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In fact, demand for local grocery shopping is steadily growing. This is due to the spread of “small-quantity shopping”—buying only what is needed—driven by prolonged high inflation and an increase in one- and two-person households. CU’s sales growth rate in the food ingredients category has maintained double-digit figures annually, at 24.2% in 2023, 18.3% in 2024, and 18.7% in 2025. CU’s grocery-specialized stores have also increased from about 70 in 2024 to about 110 in 2025. BGF Retail is considering a plan to expand both its existing grocery-specialized stores and smart grocery stores, aiming to increase the number of such stores to around 500 this year.

These moves reflect the reality of a convenience store industry where growth has stalled. According to the Ministry of Trade, Industry and Energy, as of the end of last year, the four major convenience store chains operated 53,266 stores, a decrease of 1,586 from the previous year (54,852). This marks the first annual decline in store numbers in 36 years since convenience stores were first introduced in Korea in 1988. The sales growth rates of the four major convenience store chains have also declined sharply, from 8.0% in 2023 to 3.9% in 2024 and 0.1% in 2025. As it has become increasingly difficult to differentiate themselves based on accessibility alone, the industry is collectively seeking a breakthrough through specialized stores.

Competition among convenience stores over fresh food is also expected to heat up further. GS25 plans to expand its Fresh Focus Stores (FCS) from about 800 in the first quarter of this year to about 1,100 by the end of the year. Seven-Eleven also plans to increase its specialized fresh food stores to about 200 by the end of the year. Currently, it is collaborating with Lotte Mart and Lotte Super to jointly source about 50 types of grocery items. Emart 24 is also trending toward expanding its fresh product offerings, such as meat and eggs. As each company moves to strengthen its fresh food and grocery offerings, competition surrounding local grocery shopping appears to be intensifying.

Lee Eun-hee, a professor in the Department of Consumer Studies at Inha University, stated, “Convenience stores face growth limitations if they remain channels used only by specific customer segments.” She added, “This reflects the industry’s efforts to evolve into a lifestyle platform that caters to diverse consumer groups by expanding their functions to include grocery shopping, beauty products, and delivery services.” She further predicted, “As the blurring of boundaries between business formats accelerates, competition between convenience stores and supermarkets will become even more intense.”