Homeplus Claims Normal Operations... Removes 'Dangdang Chicken' from App

Suspension of Online Sales for Key Deli Foods
Supply Disruptions and Growing Concerns Over Payments to Partners

Homeplus, which is undergoing corporate rehabilitation proceedings (court management), has been confirmed to have removed deli menu items from its online application (app). Private brand (PB) products and key items such as 'Dangdang Chicken' and 'Gobaek Sushi' are now sold only offline and cannot be purchased online. This contradicts Homeplus's explanation that business operations continue normally despite the corporate rehabilitation process.

According to the distribution industry on the 7th, Homeplus deleted the tab linking to 'Deli/Meal Kits' from the app's main screen the day before. Previously, pressing this button allowed users to view all deli menu and meal kit products sold by Homeplus at a glance, but with the termination of deli menu sales, the tab was removed. Deli foods refer to items such as chicken, sandwiches, sushi, and salads that can be eaten after simple preparation processes like heating in a microwave.

Currently, major deli menu items such as 'Dangdang Chicken', 'Sotsot Gangjeong', and 'Dumari Old-fashioned Whole Chicken' cannot be found through search. The 'Dangdang' series is a product line based on the principle of same-day cooking and same-day sales, with Dangdang Chicken as the flagship product. This item has been a steady seller, selling over 10 million packs in just over two years since its launch, gaining attention as an affordable chicken option in an era of high prices. Popular sushi items like 'Gobaek Sushi' and 'Silsok Sushi', known for their cost-effectiveness, also show no search results. The 'Homeplus Table' deli menu, which includes items like Yangjangpi and Yubu Sushi, is marked as 'temporarily out of stock', but chicken and sushi products cannot be searched.

Homeplus has emphasized that customers can shop and order food simultaneously through the app by providing a 'Deli Delivery' service that delivers deli foods to their homes. In October last year, sales increased by 27% and the number of ordering customers surged by 34% as deli foods were delivered directly to consumers' homes.

The suspension of the deli delivery service, which contributed significantly to sales, is analyzed to be due to difficulties in operating the deli corner. The deli menu involves a structure where employed staff prepare food directly using supplied ingredients. It is presumed that suppliers, who have not received payment due to Homeplus's sudden application for corporate rehabilitation, have been conservative in supplying ingredients. Because of this, Homeplus internally judged that it was impossible to handle the volume of online delivery. Meal kits, which do not require in-store preparation, continue to be sold normally on the app.

A Homeplus representative explained, "We temporarily closed some deli product orders such as Dangdang Chicken because we judged that the increase in order volume could sharply increase employee labor intensity," adding, "To dispel misunderstandings spreading, we will take measures to expose store-by-store inventory today and mark items as temporarily out of stock if sold out."

Meanwhile, since the day before, suppliers who have not received payment since early this year have stopped supplying products. Payment for January sales was supposed to be made earlier this month, but due to the corporate rehabilitation application, payments have not been made. LG Electronics, which supplies home appliances, and major food companies such as Lotte Wellfood, Dongseo Food, and Samyang Foods have stopped transactions with Homeplus. CJ CheilJedang, Nongshim, Daesang, and Ottogi have not yet stopped supplying but are monitoring the situation. Samsung Electronics has stated that it will decide whether to stop based on the payment situation.

Homeplus has announced its intention to resume payments for general commercial claims and to repay sequentially, attempting to manage the situation. Homeplus stated, "As of now, the available cash balance is 309 billion KRW, and the net cash inflow from operating activities in March is expected to be around 300 billion KRW, so the total available funds exceed 600 billion KRW. Starting today, we will resume payments for general commercial claims and plan to repay the full amount sequentially."