Big retailers lend a hand

Large discount store chains yesterday agreed to help traditional markets and mom-and-pop stores enhance their competitiveness by cooperating on promotional activities and product development.

The Korea Chain Store Association and the three large discount chains, E-Mart, Homeplus and Lotte Mart, signed a memorandum of understanding for shared development with the Federation of Korean Merchants, Kosamart and Korea Chainstores Association at Kintex in Ilsan, Gyeonggi. According to the agreement, Lotte Super will help small, independent supermarkets with retail areas of 20 pyeong (712 square feet) or less to develop private brand products and improve logistics operations.

Small supermarkets also will be able to buying stock through joint purchasing agreements with Lotte Super.

“The key to retailers’ competitiveness is product competitiveness. Now, consumers will be able to purchase cheap and reliable products at any supermarket, as we will share our purchasing power with small supermarkets,” said So Jin-se, Lotte Super CEO.

Large discount store chains agreed to set up one-on-one relationships to promote traditional market days when the big stores are closed for mandatory holidays.

In particular, according to the memorandum, large discount store chains will roll out various promotions, such as the distribution of flyers that could help boost sales. They also will help to educate traditional markets on how to beef up promotions and marketing, as well as improve sanitation, safety and customer service.

The memorandum states that the large discount store chains will seek a variety of measures for the development of regional distributors through the establishment of mutual shared growth consultation committees.

“This memorandum of understanding is significant in that it shows the unified strength and will for the shared growth of retailers, as we have been making efforts since last year to seek ways to achieve shared development,” said Lee Seung-han, co-chairman of the Federation of Korean Retail Industry.

BY KIM JUNG-YOON [kjy@joongang.co.kr]