Voluntary retirement in the retail industry is continuing. It spans sectors from convenience stores and duty-free shops to food and beverage companies. In the past, the retail industry was considered a stable workplace thanks to solid business stability based on domestic demand, but that is becoming a thing of the past.
According to related industries on the 11th, LOTTE Chilsung Beverage said on the 6th that it will implement voluntary retirement for the first time since its founding in 1950. It targets those with at least 10 years of service who were born before 1980. Employees with at least 10 years but less than 15 years of service will receive 20 months of base pay. It will also provide a re-employment support payment of 10 million won and up to 10 million won per college student in tuition support.
LOTTE Chilsung Beverage operates liquor and beverage businesses, and the business environment for both is tough. That is because domestic alcohol consumption itself is gradually declining. After COVID-19, the culture of company dinners has diminished and a consumer trend that values health has spread. Consumption of sugary drinks has also fallen for the same reason. In response, it is turning to "zero" drinks that lower calories by using alternative sweeteners instead of sugar, but it judged that it would be difficult to maintain the previous organizational scale as is.
LG H&H also implemented voluntary retirement in Oct. for duty-free and department store promotion staff. It set those born on or before Dec. 31, 1990, as eligible for voluntary retirement. The terms include 20 months of base pay, living-stability support, and tuition assistance. Even as K-beauty is loved worldwide, the slowing growth of LG H&H is the backdrop for the voluntary retirement. LG H&H grew centered on department stores, duty-free shops, and cosmetics street stores. But it failed to respond actively to consumers shifting to buy mid- to low-priced cosmetics online and at CJ Olive Young instead of high-end cosmetics.
Korea Seven, which implemented voluntary retirement for the first time since its founding in Oct. last year, also announced voluntary retirement last month. Korea Seven operates the Seven-Eleven convenience store chain. Eligible are employees aged 40 or older or in their eighth year at their current rank, or managerial employees aged 45 or older or in their 10th year at their current rank. Severance consolation pay will be 20 months of base pay for staff-level employees and 24 months of base pay for managerial employees. It will also provide 10 million won in common job placement support and 10 million won in tuition.
In the retail industry, there is a view that Ministop is behind Korea Seven's voluntary retirement. In 2022, Korea Seven invested 313.3 billion won to acquire 100% of the equity in Korea Ministop held by Japan's Aeon Group. It then worked until Mar. last year to convert more than 2,600 Ministop stores operating nationwide into Seven-Eleven locations. The goal was to turn the two-strong structure dominated by CU and GS25 into a three-strong structure through the merger of Ministop and Seven-Eleven. But there is still a large gap between the goal and reality.
E-commerce company 11Street also implemented voluntary retirement. In Nov. 2023, it implemented voluntary retirement for the first time since its founding. It has continued into its third year, in Mar. last year and Jun. this year. In Aug., it notified employees of layoffs based on Article 24 of the Labor Standards Act, "dismissal for managerial reasons."
Voluntary retirement in the duty-free industry also continued. The Shilla Duty Free privately accepted voluntary retirement applications in Apr. Eligible applicants are those aged 40 or older or with at least five years of service. The plan included paying 1.5 times the annual salary and paying base pay upon retirement after 18 months of leave. Hyundai Duty Free also carried out voluntary retirement in Apr. All employees up to and including Director General hired on or before Dec. 31, 2021, were eligible. It paid a special consolation payment equivalent to 12 months of performance-based annual salary to employees with at least three years of service and 15 months to those with at least five years.
Last year, LOTTE ON, the e-commerce platform of Lotte, and Lotte Duty Free and Lotte Hotel implemented voluntary retirement. Emart and the e-commerce affiliate SSG.com of Shinsegae Group implemented voluntary retirement for the first time since their corporate establishments, and Gmarket also implemented voluntary retirement for the first time since it was incorporated into Shinsegae Group in 2021.
A retail industry official said, "Over the past two to three years, we have improved organizational constitution for survival and reduced expenses by cutting staff. The policy of implementing voluntary retirement is likely to continue next year." The official added, "Plans to reduce staff due to the streamlining of certain processes following the introduction of artificial intelligence (AI) are included in next year's business plan."