SSMs fill Homeplus void as sales jump

Corporate supermarkets, known as SSMs, are showing signs of accelerating sales growth, with analysts attributing the gains to a windfall from the closure of major Homeplus stores.

According to industry sources, major SSM chains have recorded sales growth since April. GS The Fresh, the top player in the segment, saw its quick-commerce sales jump 52.5 percent year-on-year from May 1 to May 27, accelerating from 39.5 percent growth in April. Quick commerce accounts for roughly 10 percent of GS The Fresh's total sales, based on first-quarter figures.

Lotte Super posted a 3.5 percent year-on-year sales increase from May 1 to May 27, a sharp improvement from the 0.8 percent growth recorded in April. E-mart Everyday saw April sales rise 7.9 percent year-on-year, with same-store sales — excluding new locations — up 9.1 percent. Both chains had posted more modest gains in March, at 3.3 percent and 6.1 percent, respectively.

SSMs are typically located in neighborhood commercial districts and carry a larger share of fresh produce than convenience stores, making them well-suited to meet demand for nearby grocery shopping. Industry insiders say the recent sales surge reflects the fallout from Homeplus's troubles. Since the retailer entered court receivership last year, it has been steadily closing stores — and SSMs are moving in to fill the gap. Homeplus's store count has fallen from 117 at the end of last year to 67 currently, with 37 locations shutting down this month alone.

Multiple SSM outlets operate near Homeplus stores that have suspended operations. Around the Jamsil branch, which closed this month, nearby stores include GS The Fresh Jamsil Jangmi, Jamsil Raemian, Songpa Naru Station, Jamsil Park Rio, Songpa Seokchon Lake and Songpa 2 branches; Lotte Super Songpa, Garak and 999 Seokchon branches; and E-mart Everyday Songpa and Gakdong branches.

In the trade area around the Hwaseong Dongtan branch, which closed in March, nearby stores include GS The Fresh Dongtan Nam Plaza, Solbitnaru, Dongtan Jungang, Dongtan Giheung-ro and Dongtan Ivy Park branches; Lotte Super Dongtan The Etre, Cheonggye and Dongtan Daero branches; and E-mart Everyday Neungdong branch.

The windfall for each SSM chain is expected to be proportional to the number of stores it holds within former Homeplus trade areas. GS The Fresh had the largest national footprint as of the first quarter of this year, with 589 stores, followed by Lotte Super with 331 and E-mart Everyday with 240. Homeplus Express, the third-largest SSM operator with 290 stores as of the end of last year, has been struggling with supply disruptions due to its financial difficulties.

High inflation and elevated fuel prices have also contributed to SSM sales growth, analysts say. "With fuel prices high, more consumers are choosing to walk to a large supermarket nearby rather than drive to a hypermarket in another neighborhood," one retail industry official said.

The impact of Homeplus's store closures is expected to become even more pronounced after May. Securities analysts have been forecasting spillover benefits for hypermarket chains such as E-mart and Lotte Mart as well. Data from the Ministry of Trade, Industry and Energy show that hypermarket sales fell 6.6 percent in April, a smaller decline than the 15.2 percent drop recorded in March.