How South Korea’s supermarkets lure in neighborhood customers

Customers have been shopping more through local shops and online platforms.

South Korea’s supermarket operators are launching new initiatives, such as a heightened focus on fresh food and speedy home delivery, to better serve neighborhood needs, IGD reported.

To capture the growing trend for health products, especially fresh food products, Homeplus has transformed its 300 stores (under the banner Homeplus Express) to give more space to the fresh food category. Meanwhile, it has cut back its general merchandise range.

At the same time, Lotte Super has added “Fresh & Deli” to its store signage to emphasize its fresh food offers.

Meanwhile, GS Supermarket, a supermarket chain under GS Retail, has launched a one-hour delivery service in selected city centre stores. These stores have a separate area that serves as a logistic centre.

GS Retail said its March sales from the 1-hour delivery service is 475% higher than in December when the service was launched, driven by the ongoing demand.

Supermarkets had flat growth in 2020, whereas hypermarkets saw a relatively large decline at 2.6% YoY. This was attributed to store closure as well as changes in consumer preferences.

“Instead of going to malls and hypermarkets, customers tend to shop locally as well as online. In response to the change, retailers are strengthening their neighborhood supermarket offers,” IGD’s senior retail analyst Jiong-Jiong Yu said.