[비즈한국] It has been confirmed that BGF Logis has closed some of its logistics centers to improve operational efficiency. BGF Logis is a subsidiary of BGF Retail282330 that operates the logistics business. By delivering products to CU stores nationwide, BGF Logis has secured a stable source of revenue.
According to Bizhankook’s reporting, BGF Logis has recently closed several logistics centers in succession. BGF Logis closed its Gimpo center last year, and since the beginning of this year, it has shut down its Chilgok and Ulsan centers. A BGF Group official stated, "As the lease agreements for those centers expired, we relocated to nearby, expanded centers to optimize logistics operations."
It is reported that BGF Logis has been striving for logistics efficiency for several years. Instead of simply closing existing centers, BGF Logis plans to open a new Busan logistics center next year. The Busan logistics center is planned to feature advanced operations through various smart logistics equipment, such as shuttle-based automated storage and retrieval systems, auto-labelers (systems that automatically attach labels), and digital picking systems for automatic inventory replenishment.
Some in the business community are paying close attention to BGF Group's logistics business. BGF Logis's revenue has been growing annually: 230.4 billion won in 2021, 275.5 billion won in 2022, 309.2 billion won in 2023, and 333.8 billion won in 2024. If BGF Logis improves its performance through operational efficiency, it could be a significant boost for BGF Group.
BGF Group Chairman Hong Seok-jo also appears to have a high level of interest in the logistics business. At the groundbreaking ceremony for the Busan logistics center last September, Chairman Hong said, "The Busan logistics center will become a symbolic landmark that enhances CU’s logistics competitiveness both domestically and internationally and leads future innovation in the domestic convenience store industry." He added, "We will actively support it so that it can serve as a stepping stone for CU to expand widely into the global stage and as a new engine for Busan to leap forward as a global hub city."
The issue is the high level of dependence on the group. According to audit reports, out of BGF Logis's revenue of 333.8 billion won last year, 321.6 billion won—or 96.33%—came from BGF Group. Within this, the revenue earned from BGF Retail accounts for an overwhelming portion, totaling 312.6 billion won. For this reason, BGF Logis is still perceived merely as an affiliate responsible for CU’s logistics transport.
BGF Group’s owner family, including Chairman Hong Seok-jo, does not hold shares in BGF Logis. Therefore, the high volume of internal transactions does not pose a problem under the Fair Trade Act. However, if BGF Logis remains solely dependent on BGF Retail, there will inevitably be limits to its growth.
The number of CU convenience stores operated by BGF Retail has increased from 15,855 in 2021, to 16,787 in 2022, 17,762 in 2023, and 18,458 in 2024. However, the growth rate is slowing down. Although BGF Retail’s revenue rose by 3.21% from 1.9538 trillion won in the first quarter of last year to 2.0165 trillion won in the first quarter of this year, its operating profit decreased by 30.65% from 32.6 billion won to 22.6 billion won during the same period.
Nam Sung-hyun, a researcher at IBK Securities, analyzed, "Convenience store sales in May of this year declined by 0.2% compared to the same period last year, marking negative growth. This is due to the increase in store closure rates and the slowing pace of new store openings by major convenience store companies," adding, "We expect the slowdown in new store openings to continue into the second half of the year."
Perhaps conscious of this, BGF Logis is also putting effort into expanding its business scope. A BGF Group official stated, "In addition to convenience store logistics, BGF Logis has recently been expanding its business scope to include third-party logistics services," adding, "Based on our existing, robust nationwide logistics network, we are expanding into a business that provides logistics outsourcing for companies that have not yet established their own logistics systems."