Homeplus, the retailer currently undergoing court receivership, has suspended operations at some of its stores, allowing nearby hypermarkets and super supermarkets (SSMs) to reap windfall gains. As consumer demand that once flowed to Homeplus shifted to nearby competing stores, some saw double-digit sales growth.
According to the retail industry Monday, average sales (May 10–31) at E-mart stores near the Homeplus Myeonmok and Sinnae stores (Jungnang-gu, Seoul) and the Junggye store (Nowon-gu), which suspended operations on May 10, rose 11.4 percent from a year earlier. Considering that the average sales growth rate at E-mart stores nationwide during the same period was around 5 percent, stores in the same commercial district as the closed Homeplus outlets grew more than twice as fast.
Lotte Mart likewise recorded an average sales growth rate of 7.7 percent at stores in the Nowon-gu area during the same period. Similarly, average sales at Lotte Mart stores located in Songpa-gu, the same district as the Homeplus Jamsil store that suspended operations on the 10th, surged 11 percent.
Customers who had used the shuttered Homeplus stores also turned to nearby SSMs. In the case of GS The Fresh, sales at stores in the Jungnang-gu area jumped 17 percent from a year earlier. Sales at stores located in Nowon-gu (8 percent) and Songpa-gu (5 percent) also rose in tandem.
Initially, the hypermarket and supermarket industry had raised concerns about negative growth due to weakened consumption amid high prices and the exclusion of high oil-price support payments from their stores. However, the unexpected suspension of operations at 37 Homeplus stores nationwide allowed them to defend their performance. "Even amid sluggish consumption due to high prices, demand has shifted as a result of Homeplus closures, and nearby competing stores are seeing windfall gains," an industry official said.
This trend is expected to continue into the second half of this year. Since financing for Homeplus's receivership and the normalization of its operations is unlikely to proceed smoothly, there is also the possibility of additional operational suspensions. Kim Myung-joo, a researcher at Korea Investment & Securities, said, "Lotte Mart can expect to benefit from Homeplus in the second half as well." Jang Min-ji, a researcher at Kyobo Securities, also forecast, "E-mart's earnings momentum will strengthen as it benefits from Homeplus's suspension of operations."
However, the retail industry believes there is a strong possibility that this benefit will be only a temporary effect. With a significant portion of grocery shopping demand having already shifted to e-commerce platforms such as Coupang, the analysis is that, from a medium- and long-term perspective, the demand leaving Homeplus will also ultimately be absorbed online.
In fact, according to the Ministry of Trade, Industry and Energy's data on sales trends at major distributors, online channels accounted for 60.6 percent of total distribution sales in March. This was the first time since June 2016, when the ministry began including online distributors in its survey.
As a result, voices inside and outside the retail industry argue that mandatory closing-day regulations must be abolished for hypermarkets and supermarkets to recover their fundamental competitiveness. Public consensus is also forming. According to a survey of 2,000 adults aged 18 and older nationwide conducted by the Korea Distribution Association on the 11th, six out of 10 respondents (59.5 percent) said the "mandatory closing-day system for hypermarkets" should be eased or abolished.
"It is true that sales at hypermarkets and SSMs near closed Homeplus stores are temporarily increasing, but some of the demand leaving Homeplus will move online," a retail industry official said.
