Homeplus, a South Korean discount store retail chain, closed its store in Seodaemun on August 18. The Homeplus store in Anyang is also set to shut down on August 31. Earlier, two E-mart hypermarkets and two other Homeplus locations ceased operations. Two department stores in Busan and Masan closed down in the first half of the year. Since 2021, Korea’s major department stores and the three leading hypermarket chains have not opened a single new store, and there are no plans for new openings this year.
After decades of aggressive expansion, these retailers are now choosing between closing underperforming stores or renovating existing ones. Analysts suggest that the shift is less about competing with the rise of e-commerce and more about optimizing current operations.
“Retailers are at a crossroads where they must choose between closing down or renovating,” said an industry insider. “To remain competitive, they have no choice but to focus on streamlining and upgrading their existing stores.”
The last new store openings by the three hypermarket chains—E-mart, Lotte Mart, and Homeplus—was in 2021, when E-mart launched its Jeonju Eco City store. Homeplus last opened a new store in 2016 in Paju Unjeong, and Lotte Mart has not opened a new store since the Lotte Mall Suji in 2019.
More hypermarkets are planning to close underperforming stores. E-mart shut down its Cheonan Pentaport and Seoul Sangbong stores this year. Homeplus has announced plans to close four stores this year, with the Ansan Seonbu store set to discontinue operations by the end of next year and the Dongcheongju store scheduled to close in the first half of 2026.
Department stores are also feeling the pressure. Lotte Department Store closed its Masan location in June. Launched initially as Daewoo Department Store in 1996 and acquired by Lotte in 2015, the store had struggled with faltering sales. Similarly, NC Department Store shut down its Seomyeon store in Busan in May.
“The era when store expansion directly correlated with sales and profitability is over,” said an industry expert. “Nowadays, opening new stores with large investments could potentially jeopardize the entire company.”
For the first time last year, brick-and-mortar retailers such as department stores and hypermarkets saw their sales overtaken by online retailers. Online retail sales increased by 9% year-on-year last year, accounting for 50.5% of total retail sales, while offline retail fell to 49.5%, according to a report by the Ministry of Trade.
The executives of brick-and-mortar retailers have acknowledged the need for change, recognizing the gravity of the situation. “The multi-store strategy of the past is no longer effective,” said Kim Sang-hyun, CEO of Lotte Shopping, which controls the group’s retail business.
Lotte Shopping outlined its department store business strategy in a business report sent to shareholders before the March shareholders’ meeting. “For inefficient stores, we plan to review and implement optimal repositioning methods to improve profitability, such as subleasing, terminating contracts, and redeveloping real estate.” Both Lotte Duty Free and Lotte Holdings recently declared an emergency management system.
Similarly, Shinsegae Group initiated an emergency management system in November last year. In March and April this year, E-Mart offered voluntary retirement programs to employees with over 15 years of service for the first time.
