Warehouse stores are gaining popularity in Korea where brick-and-mortar retailers have been losing grounds against online shopping as Koreans seek greater bargains amid protracted economic slowdown.
Traders, a warehouse brand of E-Mart Inc., South Korea’s largest grocery chain under Shinsegae Group, passed revenue of 1 trillion won ($837 million) in the first half of this year and is expected achieve 2,4 trillion won by the year-end.
The milestone was achieved in the ninth year of Traders business that started in 2010 with its first store in Yongin. Sales there were 48.4 billion won in the first year. Traders’ revenue grew over 20 percent each year after 2015.
Top 10 best-selling items at Traders were all food related in the first nine months this year, suggesting a change in consumer patterns that prefer processed food and living supplies.
Among the popular food items, beef and pork products swept the top spots: seasoned beef bulgogi (1st place), seasoned hanger steak (2nd), chilled pork belly (3rd), and Australian Oyster Blade (10th). Sales of single beef bulgogi products reached 10 billion won in the first half, according to the company.
Traders’ meat products sell in large packs. One pack contains 600g to 1kg Korean beef and 1.5 to 2㎏ Australian beef, up to 2.5 times bigger than Emart packs that usually target small households of one or two persons.
Emart are ramping up investment in expanding Traders business. It added three more Traders shops this year alone. Emart rival Homeplus is responding by renewing and renaming 19 discount stores into Homeplus Special to attract consumers. Sales jumped over 20 percent after the renewal, Homeplus said. Costco, the original warehouse-type retail outlet, recently added two more stores, running 16 in total across the country.
By Lee Yoo-jin and Minu Kim
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]