Home Plus plans to expand mini-marts

Home Plus will continue its aggressive expansion into the corner store sector of the retail industry, said an official at its corporate parent.
Lucy Neville-Rolf made the remarks as corporate affairs director of Tesco, the U.K.-based majority share- holder of Samsung Tesco, which operates Home Plus, the No. 2 player in the big-box retail business after E-Mart.
“We will add 10 big-box stores and 41 super supermarkets [slightly larger than a convenience store] in Korea by the end of the year,” said Neville-Rolf. That will bring the total Home Plus numbers to 61 large stores and 73 smaller stores.
Home Plus aims to surpass E-Mart, which has only a few smaller stores. Lotte Shopping, the third-largest big-box retailer, has 53 smaller stores in operation with 14 more coming within the year.
The competition is fierce, and small retailers and the government are not comfortable with the expansion. “Don’t the big chain stores think it is enough?” said the owner of Daegwang Supermarket in Cheongdam, Gangnam, southern Seoul. He said he had lost a lot of regular customers after an E-Mart opened near his shop. “My store is making money selling gum and drinks. Imagine how it’s going to be when the giants open their own version of corner stores around here.”
Local governments are also in a dilemma. In terms of investment, the authorities welcome new stores in their town, but smaller store owners tend to persuade their governments to take a different stance.
Yesterday, the chief executives of major retailers including E-Mart, Home Plus and many others gathered at a hotel in southern Seoul to discuss how to deal with government regulations. They were to issue a declaration against the government’s policy to suppress large stores and revive traditional markets and corner stores.
Recently, Wal-Mart and Carrefour, leading global retailers, failed in the domestic market and withdrew. Some blame regulations, but Home Plus, another foreign-owned chain, is doing quite well.
The biggest factor for success is understanding the culture, said one researcher at AC Nielsen, a marketing research firm. “There are only about 10 foreign workers among all 12,000 employees at Samsung Tesco,” said the researcher. “Carrefour’s foreign employees were somewhat ignorant of the Korean work ethic, which needed consideration.”
Carrefour was also not on good terms with local suppliers. “Occasionally, Carrefour would ask us to sell our drinks at a ridiculous price,” said a salesperson at a beverage company.

By Hwang Young-jin Staff Writer [yhwang@joongang.co.kr]