Supermarkets in South Korea

PROSPECTS

Transformation of supermarkets outlets

Since the supermarkets channel is becoming mature, channel players are trying to open different types of outlets to target more specified consumer segmentation. Lotte Super has opened Lotte Premium Food Market, which sells high-quality fresh food and imported premium brands of packaged food items in residential areas where mostly higher-income consumers, who generally have more concerns about and can pay more for higher-quality food, live.

Supermarket targets single-person households

With the rapidly increasing number of single-person households in South Korea, supermarkets are expanding their offer of smaller portions of products, considering that hypermarkets and warehouse clubs offer larger packs. GS Supermarket has introduced vegetables that one person can eat for one meal and various types of meal kits so that single-person household consumers do not need to worry about the leftover food.

COMPETITIVE LANDSCAPE

Big players continue to lead

Several well-known supermarkets under large retailing companies continually lead in the supermarkets channel, as they have enough resources to support their business. However, the South Korean government has limited the operation hours and days for supermarkets as well as adopted regulations barring the opening of new supermarket outlets within 1km from traditional markets to protect small independent grocery businesses.

Discount promotions and loyalty programmes aim to retain customers

Supermarket retailers are running various types of marketing to attract more customers under a highly competitive market environment. E-Mart Everyday benefits from its parent company, Shinsegae, which has a large user-based loyalty membership by mobile application, as all retailing brands under Shinsegae participate in its rewards and discount programme.

Grocery channel anticipated to become more competitive

Not only supermarkets but also the grocery channel overall is expected to see strong competition over the forecast period. Previously grocery shopping was mostly done offline and each type of offline grocery channel had its own targeted consumer base; for instance, convenience stores focussed on single-person households and supermarkets’ main customers were shopping for families.

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