South Korea curbs excessive CVS competition

Date : 05 December 2018

South Korea’s FTC (Fair Trade Commission) approved a set of voluntary rules agreed by convenience store operators to better protect struggling franchisees.

Minimum distance between stores

Five members of the Korea Association of Convenience Store Industry, CU, GS25, 7-ELEVEN, MINISTOP, C-SPACE and Emart24, came up with a voluntary agreement to curb excessive competition.

A key centerpieceof the agreement is that stores of rival brands should be at least 50 metres away from each other. This is the first time the convenience stores have set the minimum distance since 2000.

Move to ease market saturation

FTC’s approval will see the voluntary agreement to be applied to to 96% (38,000) of convenience stores nationwide.

The number of convenience stores has risen sharply to at least 40,000 last year, driven by an increase of single-member and two-people households.

Kim Sang-jo, chairman of the FTC, said the regulations could ease saturation and prevent reckless new openings in areas where there are already many existing stores.

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