Convenience store chain Ministop pulls out of South Korea and Philippines

Photo from: Nikkei Asia

By Nikkei Asia

Japanese convenience store chain Ministop will sell its South Korean subsidiary to local conglomerate Lotte for around 30.4 billion yen ($267 million) while also unloading a stake in a joint venture in the Philippines as it focuses resources on its home market.

Ministop, a member of leading Japanese retail group Aeon, is set to sell Ministop Korea to Lotte after a review by antitrust regulators under a deal announced Friday.

Ministop Korea, the fifth-largest chain in South Korea with about 2,600 locations, entered the country in 1990 but has struggled against intensifying competition in recent years. For the year ended February 2021, operating revenue fell 6% to 97.9 billion yen, and the net loss widened to 1.2 billion yen from a 100 million yen loss a year earlier.

South Korea has 1.9 times more convenience stores per capita than in Japan, many of them small. A rising minimum wage has eroded the profitability of both franchisees and parent companies, leading to a prolonged price war.

The deal will give Lotte — the operator of the 7-Eleven chain in South Korea — a dozen logistics centers besides the Ministop stores. The No. 3 player in the local market seeks to narrow its gap with the top two rivals, including GS Retail, which runs the GS25 chain.

Ministop also said it will sell its entire 40% stake in Robinsons Convenience Stores, which operates around 460 Ministop stores in the Philippines, to joint venture partner Robinsons Supermarket.

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