SEOUL – Amid prolonged high inflation and a squeeze on consumer spending, South Korea’s retail landscape is undergoing a significant transformation. "Warehouse clubs," known for their bulk packaging and cost-efficiency, have seen their transaction volumes nearly double over the past four years, while traditional hypermarkets continue to struggle with negative growth.
The Shift in Consumer Spending
According to data released on January 25 by Wiseapp·Retail·Goods, a retail analysis service, the estimated payment index for warehouse clubs in December 2025 reached 147.1, nearly twice the figure from December 2021 (74.2).
In stark contrast, traditional hypermarkets (such as E-mart, Homeplus, and Lotte Mart) saw their payment index plummet to 87.5 last month, a 12.5% decrease compared to four years ago. This marks the third consecutive year of decline for traditional large-scale grocers.
Market Share Dynamics
The shift is also evident in overall market share within the offline retail sector:
Traditional Hypermarkets: Their share of total payments dropped from 33.2% in 2021 to 26.5% in 2025 (a 6.7 percentage point decrease).
Warehouse Clubs: Their share grew from 7% to 10% during the same period.
The "Bulk-Buy" Strategy for Survival
The primary driver behind this trend is the "value-for-money" (VFM) appeal. Consumers are increasingly opting to buy essential goods in large quantities to save on unit costs.
For instance, Traders Wholesale Club (operated by E-mart) reported a surge in demand for large-capacity fresh foods, such as bulk meat (up 9.7%) and fillet sashimi (up 15.2%), which require home preparation but offer lower prices. Their private brand, ‘T-Standard,’ also saw a revenue jump of 22.6%.
Future Outlook: Differentiation and Expansion
Propelled by this popularity, Traders recorded a quarterly revenue of 1 trillion KRW in Q3 2024 for the first time in its history. To maintain this momentum, the company plans to:
Revamp Product Lineup: Replace more than 50% of its current inventory with new, differentiated items this year.
Physical Expansion: Open a new branch in Uijeongbu by the end of 2026.
An industry official noted, "As online delivery and quick-commerce become the norm for daily needs, traditional hypermarkets are losing their edge. Meanwhile, warehouse clubs are successfully positioning themselves as the ultimate alternative for inflation-weary shoppers."
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