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Korea's supermarkets have laid off 12,700 in last five years, data shows

Published: 28 Mar. 2025, 07:00

KIM JU-YEON
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Customers shop for items at Lotte Mart's Seoul Station branch in Jung District, central Seoul, on March 27. [YONHAP]

Korea’s major brick and mortar retailers, traditionally a significant source of employment, have been cutting down on their work forces since the Covid-19 pandemic as they struggle to adapt to changing consumer preferences for e-commerce and rising labor costs.

The country’s three largest supermarket operators — Lotte Shopping, Emart and Homeplus — laid off around 12,700 employees in total, or 17 percent of their combined work force, in the five years from 2019 to 2024, according to their digital filings and registration data from the National Pension Service. Out of the three, Lotte Shopping cut the biggest portion of its work force at supermarkets, department stores and online marketplaces, followed by Emart and Homeplus.

Worker layoffs had been a major complaint from Homeplus’s labor union, which has accused the retail chain’s owner, MBK Partners, of drastically reducing workers after acquiring the supermarket, leaving heavy workloads for remaining employees. Homeplus argued that some layoffs had been inevitable as customers visiting branches dwindled after the Covid-19 pandemic, that voluntary resignations were frequent in the retail industry and that the chain had tried its hardest to relocate workers at branches that closed down during a news conference on March 14.

The fallout from the Homeplus debacle has nevertheless drawn attention to the retail sector’s woes as it competes with rapidly growing e-commerce platforms and struggles with sluggish consumer confidence.

A change made to the Distribution Industry Development Act in 2013 has particularly drawn the industry’s ire. The government, in the aim of protecting small businesses, mandated that supermarkets close down for two public holidays per month and operate between 10 a.m. and midnight and restricted stores from opening 1 kilometer (0.62 miles) from traditional markets. The government put out a plan to roll back some of the changes last January, including repealing the mandatory closure and operating hours rule, but it did not pass the National Assembly. Laws that would further lay down restrictions are being pitched in the current National Assembly, especially by the liberal Democratic Party (DP).

On March 20, 10 lawmakers including DP Rep. Yoon Joon-byeong submitted a bill that would extend the mandate prohibiting large supermarkets from opening within 1 kilometer of traditional markets, set to expire in December, by five years. A proposal to also regulate department stores, duty-free shops and outlet malls under this rule was put forward last month.

A sign at an Emart branch in Seocho District, southern Seoul, alerts shoppers to its break days on Jan. 22, 2024. The government abolished a policy that had mandated that large supermarkets close on two public holidays per month the same day. [YONHAP]

Retail insiders say such regulations have blocked the industry’s growth. Studies have indicated that small businesses such as restaurants near the supermarkets have seen less foot traffic while the initial goal of protecting traditional markets and shopping districts has not been met. More than 30 percent of 229 regional governments have changed their mandatory closing day to a weekday.

Critics of operating hour restrictions say they unfairly disadvantage brick-and-mortar shops, compared to online marketplaces that can sell and ship items 24/7. Online shopping accounted for 50.6 percent of all domestic commerce last year, a huge jump from the 32.4 percent recorded in 2017, according to the Ministry of Trade, Industry and Energy.

“Local governments are competing to attract retailers, such as large supermarkets and department stores, to revive local commercial districts, which are effective in attracting customers,” a retail insider told the JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, on condition of anonymity. “So it is frustrating that the shackles are still in place.”

BY CHOI HYUN-JU, KIM JU-YEON [[email protected]]