Spring Breeze at Large Mart... Spotlight on Emart

[Asia Economy Reporter Junho Hwang] The stock prices of large supermarket stocks such as Emart and Lotte Shopping have revived. Over the course of this month (1st to 25th), the stock price increase rates of Emart and Lotte Shopping were 6.9% and 11.4%, respectively, higher than the KOSPI increase rate of 1.1% during the same period. Analysts suggest that expectations of sales growth due to rising consumer prices and regulatory easing following the change of government are driving up stock prices.

On the 27th, Myungjoo Kim, a researcher at Korea Investment & Securities, maintained a buy rating, stating, "Large supermarkets are expected to grow by 2.3% this year compared to the previous year."

Researcher Kim first noted that the online market penetration rate, which sharply increased due to the COVID-19 outbreak, is expected to slow down starting this year. The online penetration rate is estimated to be 38.5% this year (42.3% for non-food online penetration) and 40.1% next year (43.9% for non-food online penetration). This is based on the analysis that the high growth of comprehensive e-commerce companies such as Coupang will slow down, leading to a decrease in penetration rates.

On the other hand, large supermarkets with offline stores are expected to see an expansion in growth as the impact of COVID-19 diminishes and customers go out more frequently. The store renovations of Emart and the structural improvements of Lotte Mart are also anticipated to have positive effects. Emart has carried out renovations at a total of 18 locations over two years, starting with the Wolgye branch in 2020. Lotte Mart also renovated 11 stores last year and converted the Jamsil branch into a specialized store called Zeta Flex.

Researcher Kim emphasized that among large supermarkets, "Emart should be noted." Emart plans to launch a paid membership for SSG.com within the second quarter and expand its application to all group companies in the fourth quarter," adding, "when the paid membership includes group company services, it is expected to increase the number of customers at discount stores as well."

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