BGF Retail will build up competitiveness of its stores, said Mirae Asset Daewoo on Feb. 21 raising the target price to 250,000 won (US$221.95) from 204,000 won and upgrading the recommendation to a “buy” from a “trading buy.”
Convenience store industry this year will focus on growth in size rather than increasing the number of stores due to the regulation on opening same-brand branches in close distance and sentiment contraction. BGF Retail will gain as it can reinforce existing stores through strengthening product competitiveness and expanding services. It will increase the number of branches that stock products from fast-growing categories, fortify management of merchandise and optimize outlets. Beginning operations of a central distribution center and building a central kitchen will promote efficiency in logistics and production of fresh food, said analyst Kim Myeong-ju.
The only offline retail channel that is free from the leap of online operators is convenience stores, and BGF will further strengthen its position by additional fresh food products and expanded eat-in space, said the analyst.
By Hwang You-mee (firstname.lastname@example.org)