South Korea's hypermarkets are doubling down on a strategy of selective focus, expanding shelf space for food while sharply cutting back on non-food sections. With e-commerce having taken the lead in general merchandise and other non-food categories, the chains are looking for a way forward in food, where shoppers still want to inspect quality in person before buying.
E-Mart's (139480) Eunpyeong store, which reopened after a renovation in April this year, raised food's share of total floor space to 67% from 57%, a gain of 10 percentage points, according to retail industry sources on the 29th. E-Mart's Yangjae store, which reopened in March, likewise lifted the food share to 61% from 51% while shrinking non-food sections.
At the Eunpyeong store in particular, E-Mart built a dedicated grocery zone of 230 pyeong (about 760 square meters) — more than 60 pyeong (roughly 200 square meters) larger than before — to strengthen its grocery offering. The chilled and frozen food zone was doubled in size and the deli section was overhauled. A "Wine&Liquor" section gathering several hundred varieties of wine, whiskey and traditional Korean liquor in one place was also expanded to 47 pyeong (about 155 square meters). The Yangjae store, reflecting strong wine demand in the surrounding commercial district, created a combined liquor and beverage zone of about 100 pyeong (roughly 330 square meters).
Lotte Mart is also moving quickly to reorganize its stores around food, rolling out outlets specialized in groceries. Its Grand Grocery Eunpyeong store, which reopened in December 2023, raised the food share to 90% from 66%. The Uiwang store, renovated in May 2024, lifted the food share to 76% from 66% while sharply reducing non-food shelf space. "We are making non-food sections more efficient and reorganizing stores around food, allocating more than 70% of shelf space to food to strengthen the grocery competitiveness of our physical stores," a Lotte Mart official said.
The shift toward food is also clear in sales figures. Data on hypermarket sales by product category released by the Ministry of Trade, Industry and Energy showed that food accounted for about 65% of sales as of December 2021, a figure that has risen steadily to 74.4% in August this year. In August, when Chuseok holiday demand was pulled forward, total hypermarket sales rose 4.5% from a year earlier, with food sales up 5.4% while non-food sales gained only around 1%.
The change largely reflects how e-commerce growth has reshaped the competitive landscape for hypermarkets. The chains have already ceded the lead in non-food categories such as household goods to online channels, while food categories including fresh produce and ready-to-eat meals remain areas where physical stores hold a relative advantage — prompting them to reorganize around food to set themselves apart.
"Food, including fresh produce, is still an area where hypermarkets are competitive, because shoppers want to check quality themselves before buying," an industry official said. "Since non-food has become difficult to compete in against online channels, we are looking for a way forward by maximizing the strengths of physical stores."
