Reviving Lotte Mart, Boosting 'K-Food' Even More

3Q Operating Profit 32.5 Billion KRW...178.6% Increase
Effects of Business Restructuring
Established FIL in Indonesia Last Month
Passing on Expertise of Korean Cuisine and Specialized Chefs
Developing Localized Ready-to-Eat Meals
Strengthening Online Grocery Competitiveness

On the 14th of last month, at the Pasar Lebo Lotte Mart Indonesia Food Innovation Lab (FIL) in Indonesia, Kang Leo, Head of Lotte Mart Food Innovation Center (FIC) (third from the left), Lee Jeonghee, FIC Team Leader (second from the left), and local chefs took a commemorative photo after consulting and training. (Photo by Lotte Mart).

After undergoing intensive business restructuring, Lotte Mart is set to accelerate its domestic and international business expansion through 'grocery' and 'K-food,' backed by strong third-quarter performance.

According to the distribution industry on the 7th, Lotte Mart's operating profit for the third quarter this year was 32.5 billion KRW, marking a 178.6% improvement compared to the same period last year, leading Lotte Shopping's strong third-quarter results alongside its department stores. During the same period, sales increased by 5.3% to 1.5596 trillion KRW. This outcome is attributed to offline store restructuring, voluntary retirement programs, and management efficiency improvements over recent years, as well as the expansion of renewed stores featuring key content such as 'Bottle Bunker,' where customers can taste and purchase wine, and enhancing the mart's image through the 'Zeta Flex' brand.

Riding on the improved performance, Lotte Mart aims to strengthen its business structure by focusing more on domestic and overseas 'food' sectors. It has also launched full-scale efforts to become the leading player in the overseas 'grocery market' and to drive the K-food wave.

Last month, Lotte Mart launched the Food Innovation Lab (FIL) in Indonesia. The Food Innovation Center (FIC), which Lotte Mart established in Korea in 2020, is currently developing various foods such as restaurant-style home meal replacements (HMR), meal kits, and deli products under the leadership of Center Director Kang Leo. FIL was established locally to actively develop and apply these products tailored to local tastes and to transfer K-food expertise. At the Indonesian FIL, six category-specialized chefs design recipes for various products including Korean cuisine, and product developers select the optimal partners to commercialize these recipes, developing unique home meal replacement products exclusive to Lotte Mart Indonesia.

Indonesia, the world's fourth most populous country, has an MZ generation (Millennials + Generation Z) that accounts for 40% of the population and leads overall consumption trends. Recently, K-cultural content has gained immense popularity among Indonesian MZ generation, and K-food such as tteokbokki and seasoned chicken, which have been exposed through media, are experiencing explosive popularity. Since July, the Jakarta Gandaria store, which started operating about 20 types of K-food, saw a 70% increase in total HMR category sales from July to the end of October compared to the previous year. Popular products like tteokbokki sell out before lunchtime, creating scenes where customers line up in the morning to purchase them.

Lotte Mart first entered Vietnam and Indonesia in 2008 and currently operates a total of 64 overseas stores (15 in Vietnam and 49 in Indonesia).

Meanwhile, it is also positive for the mart that Lotte is strengthening 'grocery competitiveness' at the distribution group level. Lotte Shopping recently signed a partnership agreement with UK-based global retail tech company Ocado to collaborate on the domestic online grocery business, declaring its leap to become the number one online grocery platform in Korea. With an investment of about 1 trillion KRW, it plans to build six automated logistics centers (CFCs) nationwide by 2030 and aims to achieve sales of 5 trillion KRW by 2032 through this infrastructure.

An industry insider said, "With the effects of restructuring reflected in the performance, if business capabilities expand in earnest, a structure capable of noticeable growth is possible," adding, "Since Lotte's entire distribution group is focusing on strengthening grocery competitiveness, additional synergies can be expected."