An Evolution Chronicle of GS Retail: A Retail Empire Built on Success and Failure

On the way home, people duck under the blue sign at the corner of the alley one by one.

Some heat up a lunch box, some drop off a package, and some just grab a cold can. It’s such a common sight that no one pays it any mind, but there is one question worth asking here.

How did this ordinary shop become a presence that weaves itself into almost every moment of our daily lives?

Half the answer lies in the 50-year resume of a company called GS Retail. It is the story of how a company that once made electrical wires opened a supermarket, how that supermarket gave birth to convenience stores, and how those convenience stores evolved into an app.

The other half lies in the reason this company never lost its way despite countless failures, and in this article, we will follow both of those threads.

From Goldstar Electric to Lucky Supermarket: Where are the Roots of GS Retail?

The first sentence of GS Retail’s history isn’t about a convenience store, but an electrical construction firm. It began in 1971 with a company called Goldstar Electric.

According to GS Retail’s official history, the company first entered the retail industry in 1974 by opening the first ‘Lucky Supermarket’ at the Sampoong Arcade in Euljiro. In an era when people carried market baskets and bargained for prices, a display shelf with price tags must have been quite an unfamiliar sight.

Sixteen years later, in 1990, a sign reading ‘LG25’ appeared in a neighborhood in Seoul. It wasn’t a foreign brand, but the first homegrown convenience store created with domestic capital and technology.

In 2002, the company grew by merging LG Distribution, LG Supercenter, and LG Department Store. When LG Group and GS Group split in 2005, the company received its new name: ‘GS Retail’.

It was a spinoff where the businesses were divided: GS took retail and energy, while LG took electronics and chemicals.

What the ‘Inhwa’ (Harmony) Management of the Koo and Huh Families Left for GS Retail

There is a point to address here. LG Group, the parent of GS Retail, was a company managed together for 57 years by the Koo and Huh families, who shared no blood ties. People often say that “partnerships don’t last long,” but these two families are a prime example that refutes that conventional wisdom.

They divided their roles, with the Koo family overseeing business expansion and the Huh family managing finance and operations, all based on the principle of ‘Inhwa’ (Harmony).

This principle appears in the story of GS Retail because it directly connects to how the company later defined its relationships with franchise owners.

GS Retail has long operated ‘win-win’ programs such as medical support and legal counseling for franchise owners. These aren’t just sudden ESG slogans, but rather an extension of the trust relationship the two families maintained for half a century.

As the management transitioned to the third generation, the two families went their separate ways by dividing business sectors instead of engaging in management disputes, and even that separation was so smooth it was called a ‘beautiful farewell.’

Why Has GS25 Maintained its #1 Spot in Convenience Store Revenue?

The history of South Korean convenience stores is essentially the history of the competition between GS25 and CU (operated by BGF Retail).

The two companies had different approaches from the start. CU chose to rapidly increase its number of stores, while GS25 focused on boosting the revenue of each individual store. The results are shown in the table below.

GS25 vs. CU Store Count & Revenue Comparison (2019~2023)

Year	Category	GS25	CU
2019	Number of Stores	13,918	13,877
2019	Revenue	6.8564 trillion KRW	5.9434 trillion KRW
2023	Number of Stores	17,390	17,762
2023	Revenue	8.2457 trillion KRW	8.1948 trillion KRW

CU began to lead in the number of stores starting in 2020, and by 2023, the gap had widened to 372 stores. Even so, GS25 remains #1 in terms of revenue.

According to Herald Business, the revenue gap between the two companies, which was 913 billion KRW in 2019, narrowed to 114 billion KRW in 2023. This trend itself proves the effectiveness of GS25’s strategy: by focusing on increasing revenue per store rather than just expanding store numbers, they have defended their position as much as possible.

From ‘Hyeja-ropda’ to ‘My Own Refrigerator’: Three Innovations that Grew GS25

There are also parts that cannot be explained by numbers alone.

If we were to pick three products or services that shook up the market for GS25, they would be these:

First is the lunch box. In September 2010, the ‘Kim Hye-ja Lunch Box’ was launched, featuring the name of actress Kim Hye-ja. According to E-Today, about 40 varieties were released over 7 years, reaching 1 trillion KRW in cumulative sales. It was around this time that the reaction, “Wow, this is truly Hyeja-ropda!” (a neologism meaning great value for money) spread through social media and became a part of everyday language. It is a rare case where the product itself, not an advertisement, created a new term.

Second is ‘My Own Refrigerator’. Launched in March 2011, this service allowed customers to store free gifts from ‘1+1’ promotions in an app and redeem them whenever they wanted. While the claim of “world’s first” often circulates regarding this service, GS25’s explanation clarifies that it was the ‘industry’s first’. Even if not a world first, it was clearly the first O4O (Online for Offline) service attempted in the domestic convenience store industry, and it has since gathered over 7 million members.

Third are collaboration products. Limited editions in partnership with popular IPs like MapleStory and global OTT Netflix have turned convenience stores into ‘spaces that sell experiences’. This is the background for why convenience stores have become places for MZ generations to find collectibles rather than just buy goods.

From Watsons to Lalavla: The Lessons of Failure Learned by GS Retail

Of course, not every challenge was a success.

In 2019, they rebranded ‘GS Supermarket’ to ‘GS THE FRESH’ and began using stores nationwide as online delivery hubs; this strategy helped them maintain their position as the #1 supermarket in the country.

On the other hand, the attempt to change the H&B store ‘Watsons’ to ‘Lalavla’ in 2018, as pointed out by JobKorea’s corporate analysis report, failed to overcome the overwhelming competitor, ‘Olive Young,’ and the business was eventually shut down in 2022.

Comparing the two cases reveals a lesson.

Expansion that leveraged existing infrastructure (store networks) worked, while expansion into a market with a strong incumbent without clear differentiation failed.

GS Retail itself proved with these two examples that being a giant corporation doesn’t guarantee success.

Where is ‘Our Neighborhood GS’ Taking GS Retail?

Building on its failures, GS Retail’s next vision is online-offline integration.

In 2021, it merged with GS Home Shopping to bring both online and offline under one roof, and in the same year, it invested in the delivery app ‘Yogiyo’ to jump into the quick commerce competition. In 2023, it launched the integrated app ‘Our Neighborhood GS,’ which bundles convenience stores, supermarkets, quick commerce, and mobile payments into one. The plan is to complete a structure where 18,000 stores nationwide become logistics hubs, all through a single app.

GS Retail 50-Year History at a Glance

Period	Key Events
1971~1990	Goldstar Electric founded(1971) → Lucky Supermarket 1st store(1974) → LG25 1st store(1990)
2002~2010	3-company merger(2002) → GS Retail launch(2005) → Kim Hye-ja Lunch Box(2010)
2011~2019	My Own Refrigerator(2011) → Parnas Hotel acquisition(2015) → Lalavla rebranding(2018) → GS THE FRESH(2019)
2021~2023	GS Home Shopping merger & Yogiyo investment(2021) → Our Neighborhood GS launch(2023)

Returning to the initial question, the answer is surprisingly simple.

GS25 was able to weave itself into our daily lives not because of one flashy technology, but as a result of the habits of trust maintained by the two families, the way they acknowledge failure and plan the next move, and their persistence in managing the efficiency of every single store. When you pass by that blue sign, if you remember that 50 years of trial and error are folded into it, the alley scenery might look a little different.