Big-box supermarket chains posted solid results in the first quarter this year. E-MART and Lotte Mart extended their profitability improvement and appeared to benefit partly from spillover demand following Homeplus Co.'s restructuring. Still, compared with the boom at department stores and convenience stores, which captured foreign tourist traffic and high-end spending, their growth is seen as limited.
According to the industry on the 13th, E-MART's first-quarter operating profit rose 11.9% on-year to 178.3 billion won. On a first-quarter basis, it was the best performance in 14 years since 2012 (190.5 billion won). Store remodels and growth at the discount warehouse Traders drove profitability. Revenue for the same period fell 1.3% to 7.1234 trillion won.
Lotte Mart, which suffered weak results in the second half of last year, held up in the first quarter. Revenue rose 2.6% on-year to 1.5256 trillion won, and operating profit increased 20.2% to 33.8 billion won. While the domestic business showed signs of recovery, the overseas hypermarket business grew, led by Vietnam.
Both E-MART and Lotte Mart appear to have enjoyed some windfall gains as competitor Homeplus Co. entered court receivership last year. Homeplus Co. has recently seen sales drop more than 50% from a year earlier as many stores faced product shortages that drove customers away.
Although both companies posted double-digit operating profit growth, the performance pales in comparison with department stores in a boom. In the first quarter this year, major domestic department stores including Lotte, Shinsegae, and Hyundai logged record results as luxury spending climbed amid a stock market rally and foreign tourist arrivals increased.
Lotte Department Store's first-quarter revenue rose 8.2% on-year to 872.3 billion won, and operating profit surged 47.1% to 191.2 billion won. The rebound in Lotte Shopping's results (revenue 3.5816 trillion won, operating profit 252.9 billion won) was effectively led by the department store institutional sector, which accounted for three-quarters of total operating profit.
Shinsegae and Hyundai Department Store also set record results side by side. Shinsegae Department Store's first-quarter revenue was 2.0257 trillion won, up 13% on-year, and operating profit increased 30.7% to 141 billion won. During the same period, Hyundai Department Store's revenue and operating profit rose 7.4% to 632.5 billion won and 39.7% to 135.8 billion won, respectively.
The convenience store industry also saw results improve sharply on the back of foreign demand. First-quarter operating profit at BGF Retail, which runs the CU chain, was 38.1 billion won, up 68.6% on-year. GS Retail's operating profit, which includes the GS25 chain, rose 39.4% to 58.3 billion won, while GS25's operating profit increased 23.8% to 21.3 billion won.