Hypermarkets Out, Mom and Pops In

Are the once-almighty hypermarkets starting to fizzle out?


Sales at the country's major discount outlets sunk last month by more than 20 percent on-year, according to a government report, Tuesday, and industry forecasts show that the local hypermart business will see slower growth this year due to market saturation and dampened consumer sentiment.


Cushman & Wakefield, a global commercial property brokerage, said in its recent report that consumers are starting to purchase basic necessities such as food in small amounts at neighborhood markets instead of big stores.


``Shoppers are noticing that frequenting the large have-it-all outlets often leads to unnecessary, impulse purchases,'' said Kristin Kim, manager of retail services at C&W. ``More money-conscious people are looking for closer and quicker shopping.''


So what's next for mammoth retailers like Shinsegae E-Mart, Lotte Mart and Homeplus? A cozier consumer approach, apparently.


These giant operators that have so far been running stores that are two to three times the size of a soccer field are turning their eyes to smaller and more neighborly grocery stores to attract consumers who prefer hassle-free shopping.


Dubbed ``super super market'' (SSM), the mom-and-pop-like outlets have slowly been showing up across the country. Homeplus currently runs 107 express shops, while Lotte Mart and GS Retail operate 108 and 107 nationwide, respectively.


A mom and pop store is defined as a small business that is independently owned and operated, with a small number of employees and relatively low volume of sales.


The early starters have demonstrated that the scaled-down stores may be a good way out of the slump, as Homeplus and Lotte Mart reaped sales worth 400 billion won and 850 billion won each last year from their new businesses.


However, the alliance of mom-and-pop stores isn't happy with mega-retailer intrusion.


``They killed us once already with their huge outlets, but they want to do it again,'' said Kim Kyung-bae, the head of the Korea Supermarket Alliance (KOSA), who stressed that independent stores owners are going to vanish within the next three years if giant retailers bulldoze their way in.


``They're not melting into the community as they put it nicely,'' he said. ``They're stealing other people's livelihoods.''