The closure of some Homeplus stores, currently undergoing court-led rehabilitation, has benefited nearby discount stores and supermarkets, as consumer demand shifted to neighboring hypermarkets and supermarket chains (SSMs).
According to the retail industry Thursday, average sales at E-mart stores near the Homeplus Myeonmok and Sinnae branches (Jungnang-gu, Seoul) and the Junggye branch (Nowon-gu), which suspended operations on May 10, rose 11.4% year-on-year between May 10 and 31. Given that the average sales growth rate of E-mart stores nationwide during the same period was around 5%, stores in the same commercial districts as the closed Homeplus outlets grew more than twice as fast.
Lotte Mart also saw average sales at its stores in the Nowon-gu area grow 7.7% during the same period. Likewise, average sales at Lotte Mart stores located in Songpa-gu, the same district as the Homeplus Jamsil branch that closed on the 10th, surged 11%.
Customers who had used the closed Homeplus stores also turned to nearby SSMs. In the case of GS The Fresh, sales at its Jungnang-gu stores jumped 17% year-on-year. Sales at its stores in Nowon-gu (8%) and Songpa-gu (5%) also rose in tandem.
The discount store and supermarket industry had initially raised concerns about negative growth due to weakened consumption amid high inflation and the exclusion of high-fuel-price subsidies from eligible spending venues. However, with 37 of Homeplus's nationwide stores unexpectedly suspending operations, the companies were able to defend their performance. "Even amid a consumption slump caused by factors such as high inflation, demand has shifted due to the impact of Homeplus closures, and nearby competitor stores are reaping the benefits," an industry official said.
This trend is expected to continue in the second half of this year. Since fundraising for Homeplus's rehabilitation procedures and the normalization of operations is unlikely to proceed smoothly, additional suspensions of operations are possible. Korea Investment & Securities and Kyobo Securities forecast that Lotte Mart and E-mart, respectively, would benefit from Homeplus's operational suspensions, strengthening their earnings momentum.
However, the industry views these benefits as temporary, with uncertainty over whether they will lead to a long-term improvement in business conditions. The analysis is that, since a significant portion of grocery shopping demand has already shifted to e-commerce platforms such as Coupang, demand leaving Homeplus is also likely to be absorbed online over the medium to long term.
Within and outside the retail industry, there are arguments that mandatory closure regulations must be abolished for discount stores and supermarkets to recover their fundamental competitiveness. A national consensus is also forming. According to a survey of 2,000 men and women aged 18 and older nationwide conducted by the Korea Distribution Association on the 11th, six out of 10 (59.5%) believe the "mandatory holiday system for large discount stores" should be eased or abolished.
