With the slump in offline retail overlapping with the limits of private equity–style management, the Homeplus Co. crisis is dragging on. As the absence of buyers and worsening management deepen anxiety among stores, partners, and workers, political circles and stakeholders are shifting responsibility. We examine why Homeplus Co. ended up here, what structural problems are blocking a solution, and what choices are needed next. [Editor's note]
On the morning of the 17th, workers from the Homeplus Co. branch of the Korean Confederation of Trade Unions (KCTU) Mart Industry Union, wearing yellow vests, began prostrations in front of the presidential office in Yongsan, Seoul. Marking the 258th day since Homeplus Co. entered corporations rehabilitation, they performed 258 bows to urge government intervention. Union leaders, including Chairperson An Su-yong of the Homeplus Co. branch, Senior Vice Chairperson Son Sang-hui, and Secretary-General Choi Cheol-han, have been on an indefinite hunger strike since the 8th of this month.
Chairperson An said, "The government should listen to the voices of union members who have gathered 300,000 signatures and are staging a sit-in at the risk of their lives. Do not turn away from an issue that affects local commercial districts and the livelihoods of more than 100,000 people," arguing that the government should prepare a solution to make the acquisition of Homeplus Co. happen and consider a plan in which NongHyup acquires Homeplus Co..
◇ NongHyup's role stoked by politics
According to the industry on the 25th, the argument for a NongHyup role was first raised mainly by political circles during this year's National Assembly audit. At the National Assembly audit of the Agriculture. Food. Rural Affairs. Oceans. and Fisheries Committee held on the 24th of last month, Chairperson Eo Gi-gu (Democratic Party of Korea) told National Agricultural Cooperative Federation President Kang Ho-dong to review acquiring Homeplus Co. from a "public interest perspective."
At the time, Chairperson Eo asked, "Has NongHyup ever reviewed acquiring Homeplus Co.?" and said, "If you include small business owners and partner companies, 300,000 people could end up on the street. From a public interest perspective, consider whether it would be better for NongHyup to acquire it."
In response, President Kang said, "It is inappropriate to even mention Homeplus Co.," adding, "NongHyup Distribution and Hanaro Distribution each post annual losses of 40 billion won, and we have restructured more than 200 employees."
In fact, the accumulated net loss since 2022 at NongHyup Distribution and Hanaro Distribution exceeds 80 billion won. According to materials NongHyup submitted to the National Assembly ahead of this year's audit, NongHyup Distribution recorded losses of 18.3 billion won in 2022, 28.8 billion won in 2023, and 35.2 billion won in 2024. As of August this year, the loss stood at 15.1 billion won. Hanaro Distribution also posted a cumulative loss of more than 130 billion won from 2022 through August this year.
President Kang said, "We understand Homeplus Co.'s difficulties well, but NongHyup has its own difficulties," adding, "It is unreasonable to tell us to carry someone else's load when we are already struggling with our own."
◇ Synergies unclear after a NongHyup acquisition
In the retail industry, many expect that NongHyup's acquisition of Homeplus Co. would bring more side effects than synergy. The weak performance stems from NongHyup's unique retail structure.
NongHyup differs from existing big-box retailers starting with product procurement. NongHyup Economic Holdings monopolizes purchasing authority, and Hanaro Mart only handles sales of those products. By contrast, merchandisers (MDs) at other major retailers aggressively negotiate prices if the quality of agricultural products falls below their internal standards, seeking to maximize profitability.
This structure is also hard to change easily. A retail industry source said, "As NongHyup Economic Holdings, NongHyup Distribution, and Hanaro Distribution have merged and split, people carry the label of 'which organization they came from,' and with personnel, pay, and compensation systems differing among those hired by each corporation, it is difficult to drive structural change. The backlash is intense."
Hanaro Mart also prioritizes the public-interest purpose of "protecting farms and stabilizing prices," in line with its founding intent. Rather than elevating consumer rights, it first buys agricultural products under relatively favorable terms for cooperative members.
A big-box retail official said, "It is hard to see NongHyup as the same kind of retailer. Its operating methods and DNA are markedly different. What practical meaning would there be if NongHyup, which only incurs losses due to structural issues, takes on more offline sales channels (Homeplus Co.) that cannot generate revenue?"
A retail industry source said, "You cannot say you are in retail just by buying goods and putting them on shelves," adding, "If Homeplus Co. and NongHyup come together, there is a high chance you end up with an empty store: an enormous number of branches, fresh goods represented by produce piled high on displays, but no one to buy them."
Even now, one of either Hanaro Distribution or NongHyup Distribution's stores is in the red. According to materials NongHyup submitted to the National Assembly ahead of this year's audit, Hanaro Distribution's share of loss-making stores jumped from 33.3% in 2021 to 32.1% in 2022, 52% in 2023, 60% in 2024, and 62.5% as of August 2025. NongHyup Distribution also came in at 41.7% in 2021, 50% in 2022, 48.6% in both 2023 and 2024, and 47.4% as of August 2025.
◇ Emerging conflict between Homeplus Co. union and NongHyup union
As calls grow louder for NongHyup to acquire Homeplus Co., reactions on the NongHyup side are also intensifying. The NH NongHyup branch of the National Financial Industry Labor Union (affiliated with the FKTU) issued a press release on the 6th of this month regarding rumors that the National Agricultural Cooperative Federation would acquire Homeplus Co.. The NongHyup branch said, "Some outlets that are fueling employee anxiety with baseless rumors of a NongHyup acquisition of Homeplus Co. should stop trying to shake NongHyup," adding, "If NongHyup acquires Homeplus Co., valued at 3 trillion won, it could push the NongHyup group to the brink of ruin." The union went on to stress, "There is no expectation of economies of scale or synergy from acquiring Homeplus Co.." The union also explained that with online shopping expanding, offline retail stores are seeking survival through downsizing and smaller formats.
The union said, "Improving management in NongHyup's retail business is more urgent than large-scale mergers and acquisitions," adding, "Seizing on the management's weakness toward political circles to demand a Homeplus Co. acquisition is a path that would drive NongHyup, which has greatly contributed to agriculture and the national economy, into ruin."
The reason the NongHyup union is directly refuting the Homeplus Co. union's (affiliated with the KCTU) call for NongHyup to step in is that NongHyup itself is facing a restructuring crisis internally. The National Agricultural Cooperative Federation announced in May that it would implement a stringent groupwide self-rescue plan to cut 20% of its overall budget. As part of this, NongHyup Distribution plans to improve its workforce structure to return to the black by 2029. One measure is to lower the share of full-time employees and expand non-regular positions.
◇ "Even if NongHyup acquires it, there is no competitiveness"
Some warn that trying to solve the job problem for 100,000 Homeplus Co. workers could harm 2 million NongHyup cooperative members. With chronic deficits continuing, some NongHyup subsidiaries have stopped purchasing part of the contracted volumes they promised to buy from farms and announced they would raise expenses such as feed prices sold to farmers. A NongHyup official said, "In trying to save Homeplus Co., we could be setting farms on fire—a serious problem."
Yang Seok-jun, a professor in the business administration department at Sangmyung University, said, "Offline retail overall is in a slump, raising questions about Homeplus Co.'s ability to stand on its own. Even if it is acquired by NongHyup, it would be hard to have any particular competitiveness," adding, "In the end, under market logic, Homeplus Co., which lacks competitiveness, is likely to head toward liquidation."