2024-05-06 14:01:53
Corporate supermarket sales growth
Cheap home-cooked meals are increasing in expensive areas.
Great effect on the expansion of fresh and instant food
The number of stores is increasing
Homeplus Express Seoul Junggye Branch
Corporate supermarkets (CSM), which were on the verge of extinction due to higher prices compared to large supermarkets and lower accessibility compared to convenience stores, are being reborn. While the price situation remains high, the demand for “home cooked meals”, which feature consumption patterns over short distances, small quantities and high frequency, has increased, and the strategy adapted to this has been evaluated as effective. Strengthening fresh and instant food products and introducing immediate delivery are considered the secrets of revival.
Analyzing the statistics of the Ministry of Trade, Industry and Energy on the 6th, it was found that the total sales of the company SSM GS The Fresh, Lotte Super, Home Plus Express and E-Mart Everyday the last year increased regarding 3.7% compared to the same period last year, increasing for the first time in five years. This is unusual compared to the repeated negative growth each year since recording a 2% growth rate in 2018. This is particularly in contrast to the 9.1% decline in SSM sales in 2021, when COVID- 19 was in full swing.
The number of stores, which has been decreasing for four years, has also started to increase since last year. According to the Ministry of Trade, Industry and Energy, as of March this year, the number of stores of the four SSM companies reached 1,147. The number of stores, which was 1,229 in 2018, has started to increase once more last year following four years of decline.
The background to the SSM revival is that demand for home-cooked meals has increased due to rapidly rising restaurant meal prices, and the strategy to achieve this appears to have worked. The relatively less purchased group of non-food products was reduced and the assortment of fresh products was expanded. In March this year, food accounted for 93% of SSM’s sales. It is much higher than the proportion of food sales in supermarkets (69%). Single items in small packages have also increased. Particularly, in commercial areas where there are many one- or two-person households and office workers, the range of easily accessible products has been strengthened, and a section for instant foods such as fried chicken, sandwiches and salads, difficult to find in supermarkets, was placed.
news/cms/202405/06/news-g.v1.20240506.a8942362c7334aee9f6d1a62f3a989a1_R.jpg" data-width="503" data-height="151"/> enlarge the photo By examining each business, Homeplus translated the “mega food market” introduced in discount stores to supermarkets. Mega Food Market is a store that sells groceries such as fresh food and instant food. Deli, the instant food from Homeplus Express, grew by 146% in 2021 and continued to grow by 30% in 2022 and 12% in 2023. Considering instant food sales per hour of During the day, sales between 4 p.m. and 7 p.m., when dinner is being prepared, represent more than 30% of the total. We can infer that this is a high proportion of purchases made by “home cooks” who prepare their meals at home.
At Lotte Super, a Lotte Shopping supermarket, fresh food gets results. Looking at year-over-year performance following the introduction of “End Product” in March last year, the average sales growth rate for stores running End Product was around twice the average for all stores. A last minute product is a product that selects fresh foods that are highly demanded by customers and provides them at the lowest price. Since April this year, Lotte Super has introduced and operated the final product in around 40 stores, including Jangan and Daelim branches in Seoul.
The number of users of SSM’s immediate delivery service using nearby stores is also increasing. Homeplus Express 1-Hour Immediate Delivery is a service that allows customers within 2-2.5 km of 242 stores nationwide to receive ordered products in approximately 1 hour. According to the company, during the last fiscal year (March 2023 to February 2024), immediate delivery sales increased by 53% compared to the same period last year.
The new customer repurchase rate is around 40%. This means that 4 out of 10 people repurchase within the first month of using the instant delivery service. In particular, half (46%) of VIP+ customers used the immediate delivery service 2-5 times per month.
Since April of this year, E-Mart Everyday’s immediate delivery sales have also shown growth, increasing by approximately 10% compared to the same period last year. The number of customers using the service increased as the operational distance for immediate delivery increased from 1 km to 2 km.
Experts predict that the good performance of SSM will continue for the time being. “Supermarkets are positioning themselves as intermediary retailers that combine the advantages of large supermarkets and convenience stores,” said Moon Kyung-sun, head of research at Euromonitor Korea. “We greatly appreciate the fact that they are targeting individual purchasing demand. two-person households and continuing to increase consumer comfort,” he said.
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