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Economy

Convenience Stores Rise While Department Stores Struggle With Growing Trend Of Single Person Households

By February 15, 2017 at 5:51 am
Korean Convenience Store (Photo : Getty Images)

It has been reported that GS25 which is Korea's second largest convenience store chain had a successful 2016 with sales reaching up to 5.6 trillion won which is a 20.4 percent increase from a year ago. It was also the first local company to reach 5 trillion won in annual sales.

Meanwhile CU, the largest convenience store chain had sales of 4.94 trillion won last year which is a 12.7 percent increase year on year while 7-eleven has sales of 3.7 trillion won with a year on year growth of 11.6 percent. The combined sales of the three convenience store chains had a total of 14 trillion won last year which which is 2 trillion won higher that the combined  yearly sales of the three biggest department store chains in Korea.

The rapid growth of convenience stores last year can be attributed to the increase in the number of single person households. According to the Korea National Statistical Office, there was an increase in the ration of single person households which rose from 15.5 percent to 27.1 percent between 2000 and 2015. Single person household is actually the most common set up in South Korea.

Single person households tend to buy food from outside sources rather than cook for themselves which will save them the time and maybe money from preparing their own food. As a result, convenience stores started offering single serving meals to cater to those living alone which led to their sudden growth. On the other hand, department store and groceries are struggling with the current trend in lifestyle.

Furthermore, this current trend may not only affect department stores and groceries as the rise of single person households could signal a demographic time bomb. A demographic time bomb occurs when the population of the working age and birth rate are slowly declining, while retired citizens are increasing. This will result in a significant drop to the workforce of a country which will severely affect the economy. Korea's trend of single person households which will means a lower probability of birth is proof that the country may be on their way to a massive economic problem.

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