The Revival of 'Dongne Super', Once Overshadowed by Large Marts

Corporate Supermarkets like GS The Fresh
Sales Surge After COVID-19
Shopping Nearby to Avoid Crowds
Government Disaster Relief Funds Also Play a Role
Growing Concerns Over E-commerce Logistics Centers
Increased Demand for Local Supermarkets Expected

[Asia Economy Reporter Lim Hye-seon] Jinwoo Lee (39, office worker), who lives in Mapo-gu, Seoul, stopped by a neighborhood supermarket on his way home at the request of his wife, who was working from home. Although he occasionally visited convenience stores and large marts, Lee, who rarely went to neighborhood supermarkets, noticed the changes in supermarkets. Fresh produce directly sourced from farms stood out in particular. There were also many ready-to-eat products that could be consumed at home without any additional cooking. Although many people were shopping, the aisles were wide enough to avoid inconvenience. Thanks to clearance sales, he bought fresh vegetables and fruits at prices 30% lower than the regular price. Satisfied with the quality of products and services, Lee also got a card that offers benefits at the supermarket. He bought Korean beef for grilling at a nearby butcher shop using his disaster relief fund card and even purchased bread for breakfast at an organic bakery.

As the COVID-19 pandemic prolonged, local commercial districts, which had been overshadowed by large marts, are reviving. With people's living radius shrinking due to COVID-19 and to minimize contact, more consumers are choosing neighborhood stores over crowded marts. Additionally, as people spend government disaster relief funds near their homes, local areas are becoming more vibrant. In particular, the phrase "rediscovery of supermarkets" has emerged as the number of consumers using supermarkets has surged. Following a COVID-19 case at a Coupang logistics center, the number of consumers visiting neighborhood supermarkets is expected to increase further.

According to the distribution industry on the 28th, GS The Fresh (formerly GS Supermarket) saw a 3.8% increase in customers at 230 residential area stores from February 1 to this month compared to the same period last year. The average spending per customer also rose by 16.4%. A GS The Fresh official explained, "Interest in nearby shopping has grown due to COVID-19," adding, "Visits to supermarkets near homes have increased compared to last year." Furthermore, "Purchases of wine and salads, which were previously bought at marts and department stores, have also increased," and "Sales of daily necessities, seasonings, noodles, and grains have continued to grow." During this period, sales of daily necessities (52.9%), kimchi (39.7%), wine (66.7%), and seasonings (22.5%) increased.

Sales surged significantly from May 13 to 27, when disaster relief funds began to be used. During this period, vegetables, grains, wine, and hygiene products grew by 16.2%, 44.1%, 20.6%, and 50.1%, respectively, compared to the previous two weeks (April 28 to May 12).

Corporate supermarkets like GS The Fresh were considered the underdogs in the distribution industry until last year, lagging behind large marts and convenience stores. To reduce losses in the supermarket business, GS Retail closed 25 low-efficiency supermarkets and cut related staff by 8% last year. However, the COVID-19 outbreak reversed the trend. As local commercial districts revived, GS The Fresh turned a profit with an operating income of 16.4 billion KRW in the first quarter of this year. Emart Everyday also posted positive monthly growth rates this year, with February sales up 14.0% year-on-year, and March and April sales increasing by 11.9% and 5.3%, respectively.

Consumer cooperatives connecting consumers and local farmers are also gaining attention. Yujin Kim (36), who lives in Sangam-dong, Mapo-gu, Seoul, joined the 'Hansalim' consumer cooperative near her home on a friend's recommendation. Kim used to mainly buy baby food ingredients at the organic section of department stores, but her perspective changed after visiting Hansalim. Hansalim's products were more diverse and fresher than those in the department store's organic section, and the prices were much cheaper. As more people like Kim use Hansalim, the number of cooperative members has increased. According to Hansalim, the total number of members rose from 690,000 at the end of last year to 710,000 as of May, an increase of about 10% compared to the same period last year.

A distribution industry official said, "The increase in neighborhood consumption is a positive phenomenon for self-employed people," adding, "As people's activity radius shrinks due to COVID-19, commercial districts centered around supermarkets and unique restaurants will develop."

This content was produced with the assistance of AI translation services.