This article was published on April 9, 2025, at 5:21 a.m. on the ChosunBiz RM Report site.
E-Land Group's "Kim's Convenience Store," which has been criticized for registering as a convenience store to evade regulations despite operating in the form of a super supermarket (SSM), has been confirmed to have received administrative guidance from the government to change its operating method on the 9th.
"Kim's Convenience Store," launched with the slogan "convenience store for fresh products," has handled a variety of fresh foods in bulk like vegetables and fruits, similar to SSMs, but this measure is expected to restrict such sales activities. Plans to transition some stores into franchise operations, initially aimed at expanding into franchising, have effectively been halted.
The Ministry of Trade, Industry and Energy issued administrative guidance to E-Land Group, which operates Kim's Convenience Store, at the end of last month, recommending that they adjust selling items to be similar to those of other convenience stores and establish convenience-related facilities, such as a space for consuming cup noodles, within the store. A ministry official stated, "We communicated the related content through administrative guidance to the company at the end of March, granting a six-month grace period. From the end of September, we recommended that Kim's Convenience Store only operate in the form of a convenience store." While administrative guidance does not have legal enforcement, it effectively carries compulsion due to concerns about potential disadvantages in future licensing or support.
Kim's Convenience Store, a subsidiary of the large corporation E-Land Group, opened its first store in Bongcheon-dong, Gwanak-gu, Seoul, in June 2023. Currently, there are five directly operated stores in Seoul, including Bongcheon, Dogok, Sinjeong, Sinchon, and Yeomchang. Although Kim's Convenience Store operated like an SSM, it has been criticized for registering as a convenience store to evade various regulations.
For instance, Kim's Convenience Store does not sell cigarettes, but the proportion of fresh food sales, including fruits, vegetables, and meat, is high at 20-30%. This is because it can import local food and fresh products in large quantities at lower prices by utilizing the distribution network of Kim's Club, a large discount store under the same E-Land Retail group. Kim's Convenience Store also sells semi-prepared food from Ashley, a restaurant business under the E-Land Group sharing the distribution network.
In contrast, existing convenience stores typically have limited space, restricting the variety and quantity of fresh foods handled, and some fresh products are sold in small packages. The proportion of fresh food in stores is low, around 1%. Additionally, as they prioritize quick turnover, their logistics systems are also downsized to match the demand-supply of nearby commercial areas, which imposes restrictions on establishing systems for frequently ordering and supplying large quantities of fresh foods. An industry official noted, "Kim's Convenience Store has operated in ways not different from SSM by allowing consumers to weigh and price the vegetables they gather in plastic bags."
Kim's Convenience Store has not been subject to the regulations typically applied to SSMs. According to the current Distribution Industry Development Act, SSMs can only operate from 10 a.m. to midnight. Moreover, opening near traditional commercial preservation areas within a 500-meter radius is prohibited, and regulations on mandatory closure on weekends under local government ordinances also apply. Currently, GS The Fresh, Homeplus Express, Lotte Super, and Emart Everyday, which have similar operational structures to Kim's Convenience Store, comply with these regulations.
The ministry explained the background of issuing administrative guidance to Kim's Convenience Store, stating, "It is not easy to establish uniform standards in distinguishing between SSM and convenience stores, so we had to assess based on the actual operating methods." It added, "Through expert meetings, we established internal criteria such as the proportion of primary products, store area, and operating hours. Accordingly, after comparing all convenience stores, SSMs, and Kim's Convenience Store, and conducting on-site inspections and gathering opinions, we concluded that Kim's Convenience Store is closer to an SSM. We plan to review operational methods similarly if similar cases arise in the future."
E-Land Group stated that it would diligently implement the government's administrative guidance and focus on existing businesses such as Kim's Club instead of expanding its convenience store business. Previously, E-Land Group announced plans to transition some directly operated Kim's Convenience Store locations into franchise stores in the first half of this year. However, with the restriction on the large-scale distribution of fresh products at Kim's Convenience Store, it is interpreted that it has concluded that differentiation is difficult in a convenience store market that has already reached saturation. According to the industry, as of the end of last year, there were approximately 55,000 convenience stores in the country, amounting to about one store per 1,000 people.
A representative from E-Land Group stated, "We will carry out the existing directly operated stores as per the Ministry's requests and will not proceed with convenience store expansion or additional franchise operations," adding, "We will expedite enhancing business competitiveness through expanding Ashley's partnership menu within Kim's Club and changing the store operation methods of E-Land Retail."
◇ Blurring lines between convenience stores and SSMs... Some point to "excessive regulations"
However, some argue that this administrative guidance from the Ministry is excessive regulation. As the boundaries between convenience stores and SSMs are becoming blurred, there is a need for institutional improvements that reflect industry realities.
Lee Eun-hee, a professor in the Department of Consumer Studies at Inha University, stated, "Excessive regulation can hinder consumer utility enhancement through competitive activation," adding, "There is a trend of an increasing number of single-person households, particularly among the younger generation, making it often difficult to purchase fresh products conveniently at desired times when there are no SSMs or large supermarkets near residential areas." She continued, "If the government excessively divides the boundaries between convenience stores and SSMs, it could ultimately limit consumer choices."
Lee Jung-hee, a professor in the Department of Economics at Chung-Ang University, said, "The government's administrative guidance to change stores like Kim's Convenience Store into convenience stores like existing ones could end up being a stopgap measure," adding, "If related laws are not amended more thoroughly to reduce market confusion or if related regulations are not eliminated altogether, it may give rise to different conflicts."