New food outlets appear recession-proof

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New food outlets appear recession-proof

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From left: A chef chops fresh vegetables at SSG Food Market, a premium food sector of Shinsegae Department Store in Cheongdam-dong, Gangnam-gu, southern Seoul; a shopper looks at imported cheeses at the newly renovated food sector in Hyundai Department Store’s Apgujeong branch in southern Seoul; imported groceries and other foods line the shelves at Gourmet 494, the newly opened and upscale food sector of Galleria Department Store in Apgujeong. Provided by the companies


Food sectors at department stores are increasingly going upmarket as they try to adapt to customers’ changing tastes and consumption patterns amid ramped up competition from discount stores.

Galleria Department Store recently opened its luxurious new food sector in the affluent Gangnam District, following in the footsteps of nearby Shinsegae and Hyundai department stores as the three vie for dominance in the premium food market.

Shinsegae started the trend by opening its SSG Food Market, while Hyundai threw its hat in the ring by renovating its food court.

Food sales at major department stores have grown by over 10 percent a year in recent years despite the economic pinch, in contrast to floundering demand for clothes and other items.

According to Hyundai Department Store, sales at its food sector stood at 248 million won ($223,270) per pyeong (35.5 square feet) last year, or two and a half times more than the average sales of 90 million won registered for its fashion and grocery items.

“Regardless of the economic downturn, there are growing numbers of customers looking for luxurious and high-quality food products, and we are striving to attract new imported food brands in the domestic food market,” said Shin Hyun-koo, a general manager at Hyundai Department Store.

Lotte, another major department store chain, said customers tend to spend more when they eat.

“We’re enlarging our food sectors and promoting luxurious food products, as customers spend 2.3 times more at our stores on average than shoppers who don’t eat,” said Ha Min-ji, a public relations official for the group.

Premium food sectors at department stores, which are constantly refurbished and transformed, target so-called small luxury customers, who do not usually eye luxury clothes but seek the finest food products.

The groups say they are now entering the third phase of development at their respective food sectors.

The first focused on strengthening fresh foods sold in supermarkets, such as Hanwoo, or Korean beef, as well as fish and vegetables from the late 1990s to the early 2000s. During the second phase, buyers searched for famous restaurants nationwide and invited them to set up outlets in the mid- to late 2000s.

The changes in Gangnam served as a testing ground and are now spreading wider based on positive customer feedback.

Shinsegae revamped the food sector at its Shinsegae Jukjeon branch in Gyeonggi, where it opened a second Dean & Deluca - an upscale grocery chain from New York - similar to the one it introduced to its store in Gangnam last year.

Lotte recently finished upgrading the premium section and deli at its Bundang branch in Gyeonggi. The group’s main branch, which was renovated in March, has seen sales grow 22 percent in the last three months compared to the same year-earlier period.

AK Plaza, another department store, reopened the AK Food Hall at its Bundang branch with a premium rice bar, which serves only organic rice, as well as various imported ingredients.

“Consumers’ consumption patterns have changed a lot. They easily open their wallets when shopping for food, and they are more interested in dishes and ingredients they can’t find easily in the domestic market as living standards rise,” said an employee at Lotte Department Store.

By Kim Jung-yoon [kjy@joongang.co.kr]

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