Supermarkets that have stood over all parts of the country for decades are disappearing from our daily lives. For Busan, Homeplus branches in Yeonsan and Haeundae closed last year and Homeplus Seomyeon branch closed in February this year. Furthermore, Megamart Namcheon branch and NC Department Store Seomyeon branch will be closed soon. “Channel PNU” analyzed why they shut down and how this will affect our daily lives. The steep growth of online and convenience store markets has led to this situation. Consequently, there have been job losses.

Starting with Emart Changdong branch in 1993, it has been 30 years since supermarkets began operating in Korea. In 2019, with over 400 stores, supermarkets reached their peak, sparking debates about whether they were causing the decline of local traditional markets. Consequently, regulations such as “mandatory closure on holidays” were introduced in 2012. However, supermarkets faced a downturn, lagging behind the online market during the COVID-19 pandemic in 2020.

■Offline Market Overtaken by Online

The weakened position of supermarkets is likely due to the stronger online market. This is attributed to the rise of “untact” lifestyles due to COVID-19 and online shopping platforms such as Coupang. According to the “Annual Sales of Major Retailers in 2023” by the Ministry of Trade, Industry and Energy (MOTIE), released on January 30th, online sales surpassed offline sales in terms of annual revenue proportion last year. While offline sales accounted for 50.8% and online sales for 49.2% of the total in 2022, online sales exceeded half at 50.5% in 2023.

This trend also appears in the portion of sales by business type. According to the “Report on Sales Proportion by Business Type” by MOTIE, supermarkets and online markets recorded their sales proportion each at 13.0% and 50.2% in December 2022. In December 2023, a year later, the proportion of sales for supermarkets decreased to 11.9% and the proportion for online markets increased to 51.6%.

Supermarkets are also being overtaken by convenience stores. In the report by MOTIE, sales proportion for convenience stores surpassed that of supermarkets by 16.4% in 2022 and 16.7% in 2023. The dominance of convenience stores reflects the consumption habits of the MZ generation. According to the “ShinhanCard Big Data Lab,” in the first half of 2022, the average monthly usage of Shinhan cards in convenience stores per person was 5.0 times for the MZ generation and 2.9 times for the other generations.

Under the dominance of the online market and convenience stores, supermarkets have taken survival strategies by revamping their stores or establishing specialized corners for some product categories. However, it seems that these efforts haven’t been that effective. Homeplus has introduced “Mega Food Market” emphasizing fresh food and “Mega Food Market 2.0” focusing on customer convenience, along with initiatives like “one-hour instant delivery.” Lotte Mart has launched “ZETTAPLEX,” a specialized store for wine, daily goods, and groceries, and Emart has renewed its stores along with decluttering outdated facilities to enhance competitiveness.

■Daily Life Become Inconvenient

As supermarkets close, residents are experiencing immediate inconveniences such as the disappearance of shopping destinations and cultural facilities. This is because events and cafes within supermarkets that have been community hubs disappear alongside the closure of supermarkets. Cho Chun-Han (Professor, Gyeonggi University of Science and Technology) noted, “As supermarkets have many branches across the country, they can operate experiential spaces for culture and events. The closure of supermarkets makes people who have used them uncertain about where to experience cultural events.”

Also, people prefer supermarkets to other ways of shopping. According to the “Survey of Busan citizens’ perception on supermarket business regulations” by the Busan Chamber of Commerce & Industry, out of 1,000 Busan citizens, 42.0% preferred supermarkets, and 33.5% preferred online markets, each method taking 1st and 2nd place.

Shoppers who don’t have cars will find it inconvenient to visit supermarkets far from home. As a current customer of supermarkets, Song Jin-Hyeok (22, Haeundae-gu) said, “I go to the supermarket two or three times a month. As nearby supermarkets shut down, it may be hard to do their shopping for those without cars.”

The elderly, who may find online shopping challenging, are likely to be affected. Employee A(52, Yeonje-gu) who works as a short-term staff at a supermarket said, “Busan has many middle-aged and elderly people who prefer to come to the supermarket and see things for themselves rather than shopping online. Especially for fresh produce, they buy them directly at the supermarket.”

■Disappearing Job Opportunities

The closure of the supermarkets has a knock-on effect on its workers. That is, part-time workers, who are not regular employees, are losing their jobs. Particularly, young workers such as university students working part-time are at risk of unemployment due to limited job opportunities elsewhere. Employee B (23, Nam-gu) who organizes carts at a supermarket scheduled for closure said, “As the working conditions and labor intensity here were pretty good, it’s disappointing to lose my job. I’ll probably seek a new job.” Employee A who works at the same supermarket as B said, “I’m trying to find a new job, but, as many supermarkets close, I wonder if there will be any job opportunities. I have no plan for job search yet.”

The business runners in supermarkets are also having a hard time due to their closures. Prof. Cho said, “When a supermarket shuts down, shops in it, such as food courts, clothing stores, general stores, and laundries also close their doors. Although employees may get another job, it won’t be easy for the self-employed.” C (49, Geumjeong-gu) who runs an auto repair shop in a supermarket said, “I’ve already found another store to move to. I’m so sad to move as I’ve been operating here for about 13 years and I have many regular customers.” D (36, Nam-gu) who works in a partner company of a supermarket said, “I feel a little bad about the closure of supermarkets as this leads to fewer jobs.”

The commercial areas in places where supermarkets disappear will be in a slump. If complex buildings replace the supermarket, they will have an impact on nearby areas. Prof. Cho said, “When supermarkets undergo redevelopment or when studio apartments are introduced after closure, it takes a minimum of three years. During that time, the floating population in nearby restaurants shrinks, making surrounding businesses stagnant.”

Reporter Yoon Ji-Won

Translated by Lee Soo-Hyun