Store Renewals and New Openings to Proceed Simultaneously
Three New Emart Stores and Two New Lotte Mart Stores Planned
Tailored Renewals by Local Commercial Districts Also Underway
The distribution industry has aggressively pursued new offline store openings since the beginning of the year. While previously focusing on store renewals to strengthen internal management by closing stores that suffered poor performance due to demographic changes centered on single-person households, the strategy this year is to expand the number of new stores to grow the business scale.
Emart will open its 23rd store, 'Traders Magok,' on the 14th in Magok, Gangseo-gu, Seoul. This is the second store to open in the Seoul area, following the Suwon Hwaseo store in 2023, marking a 14-month gap between openings. The total store area is 3,520 pyeong (11,636㎡), which is 10% larger than the top-selling Traders Hanam store. As the first large supermarket to open in the new Magok city, where over 1.2 million people reside, it is considered a key commercial district.
Traders Incheon Guwol Store to Open in the Second Half
Emart will also open 'Traders Incheon Guwol Store' in the second half of this year. This decision reflects the increased demand for warehouse-type discount stores due to high inflation, which is expected to have a significant effect on new store openings. Last year, Traders' sales reached 3.5 trillion KRW, a 5% increase compared to the previous year. Operating profit surged 60% to 92.4 billion KRW.
Emart (discount store) plans to open 'Emart Godeok Gangil Store' in the first half of the year, following the opening of Emart Food Market Suseong Store in December last year. Godeok Gangil Store is about a 7-minute drive from the existing Emart Myeongil Store. Initially, Emart planned to sell the aging Myeongil Store and relocate to Godeok Gangil Store. However, after the sale fell through, Godeok Gangil Store will operate under a food market concept. An Emart representative explained, "We attempted to sell Myeongil Store, but it is currently operating normally with no plans to sell in the near future. Godeok Gangil Store will focus on strengthening fresh food categories and will have a different concept from Myeongil Store."
Store renewals will be carried out at a total of eight locations. Along with the newly opened Emart Mokdong Store last month, Namyangju Store will also undergo renewal in the second half of the year. Three stores will be converted into mall-type (Starfield Market) and food market formats respectively. The specific stores for conversion have not been decided.
Until now, Emart has focused on strengthening profitability by selling inefficient stores and renewing existing stores to enhance grocery and experiential content. In fact, there were no new store openings from 2022 through last year.
However, since last year, Emart has stopped selling inefficient stores and reconsidered new openings. The strategy has shifted to increasing customer traffic and sales scale through both new store openings and renewals. The planned investment for this year has increased compared to last year. Emart plans to invest 350 billion KRW this year in new store openings and renewals, up from 140 billion KRW last year. Approximately 200 billion KRW of this will be allocated to discount store renewals and new openings.
Emart has secured five additional new sites and plans to open five more stores by 2027. With the expected greater effect of 'integrated acquisitions' this year, both scale and internal strength are anticipated to be enhanced.
Lotte Mart to Open Two Stores Including Guri Store in the First Half
Lotte Mart plans to open Guri Store within the first half of the year, starting with Cheonho Store in Gangdong-gu, Seoul. This marks Lotte Mart's first new store opening in over six years. Since opening Incheon Terminal, Icheon, and Suji stores in 2019, Lotte Mart has focused on store rationalization. As a result, the number of stores decreased from 125 in 2019 to about 110 last year. Fourteen inefficient stores, including Suwon Yeongtong, Incheon Terminal, Uijeongbu, and Yangju stores, were closed, focusing on internal management rather than expansion. With two additional stores this year, Lotte Mart's total store count will increase to 112.
Cheonho Store, which opened last month, is Lotte Mart's first store targeting the Gangdong-gu commercial district. Although competitors such as Emart, Homeplus, Hanaro Mart, and corporate supermarkets (SSMs) like GS The Fresh, Homeplus Express, and Lotte Super existed, Lotte Mart had no presence there. The store is relatively small at about 1,300 pyeong but operates with a focus on fresh groceries, considering the high proportion of people in their 30s and single-person households in the surrounding Cheonho-dong and Seongnae-dong areas. Thanks to this, sales at Cheonho Store during the first three weeks after opening on the 5th were over 70% higher than the average sales of Lotte Mart stores under 2,000 pyeong.
Guri Store is a re-leased store for Lotte Mart. Lotte Mart operated Guri Store from 1999 to 2021 but vacated after the contract expired. As of 2018, Guri Store ranked third in sales after Lotte Mart World and Seoul Station stores, making it a valuable location, so the sales impact was significant. Lotte Mart plans to target Guri and the surrounding Namyangju commercial district with a grocery-specialized store concept.
Lotte Super plans to expand its franchise business this year by adding 20 to 30 stores. After closing 165 inefficient stores since 2020, Lotte Super aims to continue profitability-focused management by increasing franchise stores. In December last year, it showcased 'Hanam Mangwol Store' as a model franchise store to prospective franchisees.
A Lotte Mart representative said, "We will also pursue renewal openings focusing on stores with high customer demand. To improve profitability, we have integrated sourcing for mart and super products and have been consolidating logistics infrastructure since last year by establishing a logistics team."
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