Large-Scale Discount Events End, Only 1+1 Promotions Remain
Agricultural and Livestock Federation: "Unsettled Payments Could Reach Up to 10 Billion KRW"
Unpaid Retirement Pension Reserves Heighten Employee Anxiety
Mart Off-Season Begins in Even-Numbered Months... Cash Flow Uncertainty Grows
"From now on, for exactly 10 minutes during the closing sale, we are offering up to 65% off on Hanwoo beef sets."
On the afternoon of the 7th, at a Homeplus Mega Food Market live store in the Seoul metropolitan area, repeated announcements were made over the meat section to attract consumers shopping for dinner ingredients. Customers pushing their carts showed interest upon hearing that some products, including Hanwoo sirloin, chuck flap tail, and brisket, which were already being sold at up to 50% off the regular price, would receive additional time-limited discounts. However, due to the conclusion of a large-scale event that had been ongoing for over a month since February 28th to celebrate the company's 28th anniversary, there were not many noticeable discounted items. Only some signs advertising 1+1 promotions were attached here and there on relatively slow-selling processed foods, home meal replacements (HMR), and Homeplus private brand (PB) products.
An announcement stating that the delivery of Seoul Milk products is delayed is posted on the milk shelf at a Homeplus store in the Seoul metropolitan area. Photo by Kim Heungsoon
As a month has passed since Homeplus abruptly entered corporate rehabilitation procedures on the 4th of last month, signs of internal and external discord are spreading. First, with the large-scale discount events over and the arrival of even-numbered months, which are considered the off-season for the mart industry, it is uncertain whether cash flow through normal business operations will proceed as planned by the company. Although the supply suspension by some manufacturers, who feared payment settlement issues, seemed to have calmed down, the agricultural and livestock industries have recently brought up this issue again, reigniting friction with Homeplus.
Earlier, the Korea Federation of Agricultural and Livestock Associations, composed of 22 agricultural and livestock organizations, issued a statement saying, "Dairy cooperatives and companies have not received payment settlements ranging from 4 billion to 10 billion KRW from Homeplus," and strongly urged the government to investigate the damage status in the agricultural and livestock sectors and prepare countermeasures to prevent further spread of the damage. They particularly expressed concern that if the supply disruption involving the Nonghyup Economic Holdings, which amounts to nearly 200 billion KRW, continues, the damage to the agricultural and livestock industries could snowball.
In a Homeplus store in the Seoul metropolitan area, signs announcing a 1+1 promotion are attached in various places on the processed food shelves. Photo by Kim Heung-soon
Homeplus responded by saying the federation's statement was inaccurate, stating, "In a situation where 20,000 employees are working together to normalize operations to protect jobs that are vital for livelihoods, some large corporations and key stakeholders are making unreasonable demands, prioritizing their own interests rather than helping with normalization, akin to 'taking away an umbrella on a rainy day.'"
They specifically mentioned the case of Seoul Milk Cooperative, which has not supplied products for nearly three weeks since the 20th of last month. Seoul Milk is demanding cash prepayment conditions and has stopped supplying products, causing significant damage not only to dairy farms but also to Seoul Milk dealerships and secondary partners in the agricultural and livestock sectors. In fact, a notice stating "Product delivery is delayed due to Seoul Milk's circumstances" is posted on Homeplus's milk shelves.
However, the Korea Federation of Agricultural and Livestock Associations rebutted this, escalating the conflict. The federation said, "Homeplus made an unreasonable move to shift public criticism onto the agricultural and livestock sectors," and countered, "Homeplus's audacity is laughable." Seoul Milk also stated that the supply suspension to Homeplus is due to disagreements over payment methods and shortened deadlines, and denied Homeplus's claim that secondary partners are facing issues.
Internal anxiety has also increased as Homeplus revealed that it has not paid approximately 110 billion KRW in retirement pension external reserves due in 2025, as well as additional reserves arising from the Supreme Court's change in the standard for ordinary wages in December last year, due to short-term liquidity issues following the initiation of rehabilitation procedures. The company stated that the current retirement pension reserve rate is about 83%.
A Homeplus official explained, "Under normal circumstances, a reserve rate of 83% for external reserves poses no problem for retirement pay disbursement," adding, "We plan to first pay 36.7 billion KRW, which is one-third of the unpaid reserves due by February next year, and include the remaining unpaid amount and additional contributions due to the ordinary wage ruling in 2025 in the rehabilitation plan for priority payment." They further stated, "Considering employees' anxiety due to the rehabilitation process, we plan to fully reserve the unpaid funds without any disruption and alleviate employees' concerns," and added, "Employees' salaries and retirement pay are top priority for repayment, so full payment will be made without any issues."
On the other hand, the Mart Industry Labor Union criticized the irresponsible attitude of MBK Partners, the private equity fund (PEF) operator and major shareholder of Homeplus, for exacerbating confusion on the ground. The union said, "After sending official letters four times, we finally received a response from the company regarding the retirement pay reserve rate, but the content was far from expectations," expressing concern that "Considering the additional retirement pay expected in 2026 (54 billion KRW based on 2025), the actual reserve rate will be even lower." They continued, "MBK did not disclose retirement pay reserve information for over a month and only announced it belatedly, claiming there was no problem despite the reserve rate dropping further," criticizing this as "a complete disregard for the reality on the ground."
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