Lotte acquires Ministop in Korea

 Lotte acquires Ministop in Korea

Ministop, a member of Aeon retail group (Japan), is about to sell its Korean subsidiary to Lotte.

The deal is worth about 30.4 billion yen ($267 million) after it was approved by the antitrust watchdog. Ministop Korea is the fifth largest convenience store chain in South Korea with approximately 2,600 locations. The chain entered the market in 1990, but has suffered from increasingly stiff competition in recent years.

For the fiscal year ended February 2021, the chain's operating revenue fell 6% to JPY 97.9 billion, and net loss increased to JPY 1.2 billion from a loss of JPY 100 million in the same period last year. before.

Korea has 1.9 times more convenience stores per capita than Japan. Many of these stores are small in scale. Rising minimum wages have eroded the profits of both the franchisor and the parent company, leading to a protracted price war.

The deal will provide Lotte - the operator of the 7-Eleven chain in South Korea - with dozens of logistics centers in addition to Ministop stores. Lotte holds the third position in the Korean convenience store market, with its top competitor being GS Retail, which operates the GS25 chain.

Ministop also said it would sell its entire 40% stake in Robinsons Convenience Stores, which operates about 460 Ministop stores in the Philippines, to its joint venture partner Robinsons Supermarket. The new acquisition announcements come after Ministop liquidated a subsidiary in Qingdao, China last fall.

Ministop is the fourth largest convenience store chain in Japan, after 7-Eleven, Family Mart and Lawson. Overseas markets promise growth for Ministop but the company has struggled with profitability. The foreign division posted an operating loss of 1.1 billion yen for the nine months ended November, following a loss of 1.6 billion yen earlier in the year.