homeplus Store Closures Reshape South Korean Discount Retail Landscape
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Seoul, South Korea – A wave of store closures by homeplus, a major South Korean discount retailer, is set to considerably alter the competitive dynamics of the nation’s retail sector. The company, currently undergoing a corporate rehabilitation process, will shutter 15 stores by May 2026 as it struggles with lease negotiations and financial pressures. This strategic move is expected to benefit competitors E-Mart and Lotte Mart, who are already seeing increased foot traffic and sales in areas affected by the Homeplus closures.
Homeplus Restructuring and store Closures
As of mid-August 2024,Homeplus operates 125 stores nationwide,a decrease from 126 earlier in the year following the closure of its Bucheon Sangdong branch. The company announced plans to close an additional 15 rental stores by May 2026,after failing to reach agreements with landlords on lease adjustments. This brings the total number of planned closures to 20, reducing Homeplus’s store count to 106 by the first half of 2026-a 20-store reduction from the end of 2025.
This restructuring is part of a broader effort by MBK Partners,homeplus’s major shareholder,to reduce costs and streamline operations ahead of a potential sale or merger. The company initially planned to close eight stores, with four scheduled to close by the first half of 2025. The acceleration of these closures underscores the financial challenges facing Homeplus in a highly competitive market.
Did You Know? Homeplus’s Bucheon Sangdong branch, despite being a high-performing store ranking fifth nationally in sales as recently as 2023, was still deemed unprofitable enough to warrant closure due to high lease costs.
Impact on Competitors: E-Mart and Lotte Mart
The closures are widely anticipated to drive customers to competing retailers, particularly E-Mart and Lotte Mart. E-mart, currently the leading discount store in Korea with 133 locations, has already reported a 12% increase in sales at its Bucheon middle East store following the closure of the nearby Homeplus branch. Lotte Mart, with 112 stores, is also experiencing increased customer visits, particularly as the end of May.
Analysts predict that the shift in market share will likely push Homeplus from its current second-place position to third, behind E-Mart and Lotte Mart. Park Sang-joon, a researcher at kiwoom Securities, stated that the closures create a “high possibility of expanding the benefits of competition-oriented reflexes.” He further anticipates that E-Mart and Lotte Mart will see increased growth rates due to rebounding consumer sentiment, interest rate cuts, and government stimulus measures.
| Retailer | Store Count (Aug 2024) | Projected Store Count (H1 2026) | Market Position (Current) | Market position (Projected) |
|---|---|---|---|---|
| E-Mart | 133 | 133 (no closures planned) | 1st | 1st |
| Lotte Mart | 112 | 112 (no closures planned) | 3rd | 2nd |
| Homeplus | 125 | 106 | 2nd | 3rd |
Strategic Responses from E-Mart and Lotte Mart
E-Mart is proactively capitalizing on the situation by implementing aggressive price discounts and unifying its product purchasing structure across its various distribution channels-including E-mart, Traders, Noland, and Everyday. This streamlined approach aims to attract departing Homeplus customers and bolster sales. Lotte Mart is also adopting a strategic approach, aiming to leverage the market changes to increase its sales. An official from Lotte Mart stated the company intends to “use this issue strategically” to attract customers,though they haven’t yet seen the same level of sales increase as E-Mart’s bucheon Middle East store.
Pro Tip: retailers often see a temporary boost in sales following a competitor’s closure, but sustained growth requires a focus on customer loyalty and competitive pricing.
The changing retail landscape highlights the challenges faced by brick-and-mortar stores in South Korea, a trend observed globally. According to a report by Deloitte, the retail industry is undergoing a significant change driven by e-commerce and changing consumer preferences [1]. This requires retailers to adapt their strategies and invest in omnichannel experiences to remain competitive.
What impact will these closures have on employment in the affected regions? And how will Homeplus attempt to regain market share in the long term?
Evergreen Context: The South Korean Retail Market
The South Korean retail market is known for its high level of competition and demanding consumers.Discount retailers like Homeplus, E-Mart, and Lotte Mart play a crucial role in providing affordable goods to a large segment of the population. Though, the rise of online shopping and changing demographics are forcing these retailers to adapt. The trend towards smaller, more specialized stores and the increasing popularity of convenience stores are also reshaping the market. Furthermore, the government’s policies regarding retail regulations and consumer protection significantly influence the industry’s dynamics.
frequently Asked Questions
- What is driving Homeplus’s store closures? Homeplus is closing stores due to financial pressures, lease negotiation failures, and a broader corporate restructuring effort.
- Which retailers are expected to benefit from Homeplus’s closures? E-Mart and Lotte Mart are anticipated to gain market share as customers shift to their stores.
- How many stores is Homeplus planning to close? Homeplus plans to close a total of 20 stores by the first half of 2026.
- What is E-mart doing to capitalize on the situation? E-Mart is implementing aggressive price discounts and streamlining its product purchasing structure.
- What is the current market position of each retailer? Currently, E-Mart is first, Homeplus is second, and Lotte Mart is third. This is expected to change with Homeplus falling to third.
We hope this article provided valuable insight into the evolving retail landscape in South Korea. We encourage you to share this facts with your network, leave a comment below with your thoughts, and subscribe to our newsletter for more breaking news and in-depth analysis.