As the slump in Korea's big-box retail industry drags on, E-MART and Lotte Mart, the No. 1 and No. 2 players, are showing clear differences in their management strategies this year. While E-MART is putting emphasis on strengthening offline competitiveness by continuing to open new stores, Lotte Mart is focusing on bolstering its online capabilities, led by its Busan logistics center, and expanding its overseas business.
According to the retail industry on the 25th, E-MART plans to open a new warehouse-club format Traders store in Uijeongbu, Gyeonggi Province, in the second half of this year. Once the opening is completed, the number of Traders stores nationwide will increase to 25 by year-end. E-MART also opened three stores last year: Traders Magok in February, E-MART Godeok in April, and Traders Guwol in September.
In addition, E-MART plans to renovate seven stores nationwide this year into a mall-type store with enhanced experiential content or into a "Starfield Market" format. Starfield Market introduces to E-MART stores the customer-friendly space planning of Shinsegae Group's complex shopping mall Starfield, featuring the creation of a community lounge in the core store area to lengthen dwell time.
E-MART's offline-focused strategy is also evident in Shinsegae Group Chairman Chung Yong-jin's on-site visits. On the 6th of last month, Chung visited the Starfield Market Jukjeon store and said, "In a turbulent retail market environment, I feel a strong responsibility that Shinsegae Group must become the 'shopping mecca' most trusted by customers in their daily lives."
Lotte Mart, on the other hand, has no plans to open new domestic stores this year. Although it opened the Cheonho store in January and the Guri store in June last year, this year it will focus on improving efficiency and boosting profitability rather than expansion. A Lotte Mart official said, "We are pursuing renovations of some underperforming stores, but at this stage we have no plans for new openings."
This aligns with Chairman Shin Dong-bin's emphasis on "profitability-centered management." Last month, Shin held the Value Creation Meeting (formerly the presidents' meeting) and called for a shift from conventional sales-driven top-line growth to strengthening profitability, investing efficiently, and managing with a focus on return on invested capital (ROIC).
Instead, Lotte Mart is concentrating its capabilities on strengthening its online fresh-food delivery competitiveness through the company's mid- to long-term priority, the "Ocado Project." The core is to adopt the smart platform of U.K. retail tech company Ocado and invest 950 billion won by 2030 to build cutting-edge automated logistics centers (CFCs) in six regions nationwide.
Lotte Mart is set to complete its first CFC in Busan in the first half of this year. It plans to centralize fresh-food deliveries in the Busan–Gyeongnam region, which had been handled mainly by local stores, into the CFC, boosting logistics efficiency through AI-based demand forecasting and inventory management, route and dispatch optimization, and a robot picking system. This is also expected to strengthen the competitiveness of the online platform "Lotte Mart Zetta," unveiled in April last year.
Offline expansion will focus on overseas markets, where performance is clearly improving. Lotte Mart's overseas business last year recorded sales of 1.5461 trillion won, up 3.3% year over year, and operating profit of 49.6 billion won, up 3.6%. Early this year, Lotte Mart renovated its Da Nang and Nha Trang stores in Vietnam, and in the second half it plans to open two additional new stores in Vietnam. In Indonesia, it will expand conversions to hybrid stores that combine wholesale and retail.
Meanwhile, according to the Ministry of Trade, Industry and Resources, among all retail channels last year, only big-box stores saw sales fall, down 4.2%. The share of big-box stores in total retail sales also fell to 9.8%, dropping below 10% for the first time.
An industry official said, "It is clear that growth at big-box stores has slowed, but even amid the crisis, efforts continue to find breakthroughs through business retooling and restructuring."