Supermarkets in South Korea

PROSPECTS

Supermarkets growth stagnates

After showing fast growth over the past five years in terms of number of outlets, the growth of supermarkets is stagnating. In particular, major players Lotte Super and Homeplus are closing down some of their outlets that record sales losses to increase their profits.

E-commerce threatens supermarkets after tackling hypermarkets

Supermarkets used to be less affected by e-commerce compared to hypermarkets, however the impact is becoming more apparent, as South Korean consumers start to prefer buying smaller packages online while food and drink e-commerce players are providing delivery services within one day. Woowa Brothers, a foodservice delivery platform, launched B Mart in 2019, which aims to deliver food for one meal within 30-40 mins by building its own logistics sites across Seoul.

COMPETITIVE LANDSCAPE

Lotte Super continues to lead the channel, though share decreases

Lotte Super is the largest supermarket operator in South Korea and continues to lead the channel in 2019. However, it has started to close some of its outlets, namely those that do not record high enough sales, in an effort to restructure its retailing strategies under Lotte Group.

GS Supermarket increases number of outlets

While other major players are struggling to open new outlets, GS Supermarket is able to enjoy growth taking more share from competitors with its food categories. GS Supermarket introduced four discounter outlets which provide lower price range items compared to its other regular outlets.

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