In the Era of Soaring Prices, Discount Stores Also Feel the 'Burden'... Number of New Store Openings Hits '0'

No Large Mart or Warehouse Discount Store Openings
Contrasting Last Year's Opening Competition
"High Inflation and Endemic Reduce Store Appeal"

The era of warehouse-style discount stores is coming to an end. Just last year, large supermarkets were putting all their efforts into strengthening warehouse-style discount stores where consumers could purchase bulk products at reasonable prices, but they have changed their stance in just over a year. This is because consumers' wallets have been tightly closed due to the burden of ultra-high inflation, followed by a decrease in demand for bulk products as the world has fully entered the endemic phase.

According to the distribution industry on the 20th, there have been no new openings of warehouse-style discount stores by large supermarkets this year. This is a stark contrast to last year when they were fiercely competing to expand their stores. Lotte Mart's last opening was the 'Lotte Mart Maxx Changwon Jungang Branch' at the end of March last year. In the first half of last year, they opened Songcheon Branch (January), Sangmu Branch (January), and Mokpo Branch (January) consecutively, showing strong determination to strengthen warehouse-style discount stores, but their momentum has waned since the second half of last year. The ambition to open 20 new Maxx stores by 2023 has effectively been shelved. According to the original plan, Lotte Mart was supposed to convert its paid membership warehouse-style discount stores, Big Market (Geumcheon Branch, Yeongdeungpo Branch), into Maxx stores last year, but they still maintain the Big Market format.

A Lotte Mart representative said, "We are currently observing consumer purchasing trends and considering whether to open new stores," adding, "Regarding the conversion of Big Market stores to Maxx, we are proceeding with the changes sequentially, taking cost factors into account."

Emart is officially preparing to open the Hwaseo Traders in Suwon within this year. However, even if Emart opens Hwaseo Traders this year, it seems difficult to execute the original plan of opening five Traders stores nationwide by 2025. In fact, the Emart Traders in Guwol 2 District, Namdong-gu, Incheon (4 floors above ground, 1 basement floor, 48,680㎡), included in the plan, completed all permits by receiving approval for 'large-scale store establishment' in June, but it has not yet submitted the construction notification. Once the construction notification is submitted, groundbreaking can begin immediately, but further internal review of the business plan is deemed necessary.

A Namdong-gu Office official stated, "After receiving approval, the notification must be submitted within two years (by 2025)," adding, "However, if further business feasibility review is needed, the period can be extended."

Homeplus, previously stimulated by large supermarkets' efforts to expand warehouse-style discount stores, attempted to convert its existing 10 stores into 'Homeplus Special' but failed to fully implement this. Currently, it is showcasing renovated stores under the name 'Homeplus Mega Food Market.' Costco also has no new store openings.

An industry insider explained, "During the high inflation period, large supermarkets are offering fresher products at lower prices," adding, "The appeal of warehouse-style stores lies in buying large quantities of products cheaply and storing them for a long time, but at this point, that appeal has diminished."