Kang Sunghyun, CEO of Lotte Mart and Lotte Super: "Focusing on Online Investment, Reducing Inefficient Stores"

Strengthening Online Investment Ahead of Next Year's Busan CFC Launch
Focusing on Offline Renewal and Strategic Response

"We will focus on and intensify our investment in the online grocery business."

On June 26, Kang Sunghyun, CEO of Lotte Mart and Lotte Super, made this statement during the opening ceremony of 'Grand Grocery Guri Branch' in Guri, Gyeonggi Province. Meeting with reporters, he emphasized, "We will evaluate offline stores strictly from a return on investment (ROI) perspective and decisively close down inefficient locations."

Kang Sunghyun, CEO of Lotte Mart (third from the left), is cutting the tape together with Baek Kyunghyun, Mayor of Guri (fourth from the left), and others.

Lotte Mart plans to concentrate its company-wide resources on the online business, with the automated logistics center (CFC) in Busan set to begin operations in the first half of next year. The CFC is a fully automated fulfillment center that handles storage, sorting, and shipping of products.

Currently, the domestic online fresh food market is dominated by Coupang. To overturn this, Lotte Mart has partnered with UK-based retailer Ocado and plans to invest 1 trillion won by 2030 to establish a total of six CFCs nationwide. The logistics centers will adopt Ocado's artificial intelligence (AI)-based smart platform (OSP) to enhance efficiency across the entire process, from demand forecasting and inventory management to delivery. Lotte Mart aims to achieve 5 trillion won in domestic online fresh food sales by 2032.

Kang stated, "The Grand Grocery Guri Branch will serve as a hub for our online business in the northern Gyeonggi region," adding, "Ahead of the CFC opening next year, it will be an indicator of what products can be offered online." At the Guri branch, competitive product lines for the online market, such as premium Japanese frozen foods and desserts, have been prominently displayed.

In April, Lotte Mart also launched 'ZETA,' an online-exclusive application equipped with AI-based personalization features. The app is expected to become the main channel for online fresh food orders as it integrates with future CFC operations. However, until the CFC becomes operational, the company will maintain a system of direct in-store picking and delivery.

The offline store strategy has also been clarified. Existing stores will focus on strengthening competitiveness through renewal, while underperforming stores will undergo restructuring. Kang said, "We will continue to offer differentiated products and trendy initiatives that customers want," and added, "Although some stores still have time left on their leases, unprofitable locations will be phased out step by step."

The 'Grand Grocery' format, which specializes in food, is expected to expand, especially in commercial areas with a high concentration of young consumers. Currently, there are three branches in operation: Eunpyeong (Mart), Dogok (Super), and Guri (Mart). With the successful results at Dogok, there is a high possibility that expansion will continue regardless of whether the location is a mart or a super. Kang emphasized, "Grand Grocery stores are a format targeting young commercial districts," and added, "We will flexibly expand across both super and mart formats going forward."

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