Korean Job Discussion Forums

[wylies99]

Mom & Pop Shops to Develop Joint Brand

http://www.koreatimes.co.kr/www/news/biz/2009/08/231_49786.html

By Kim Tong-hyung
Staff Reporter

An outcry from small shop owners has erupted over the growing number of ``super supermarkets'' (SSM) operated by mega discount chains, which they see as insurmountable threats to their livelihoods. The complaints have government officials making various promises to help them compete against their bigger, corporate foes.

The Small and Medium Business Administration (SMBA) said it is currently considering new ways to improve the competitiveness of individually owned supermarkets, which includes the strategy of combining them under a single, government-made franchise. This would allow the small shops to reduce costs through the collective purchasing of products and also lower their spending on marketing efforts, SMBA officials said.

SMBA would not require the government-brand supermarkets to share their profits, but would pockets some money from registration fees and a portion of the sales from the joint purchases from wholesalers.

The idea is to simply copy the success formula of the SSM, who benefit from the massive networks of Lotte Mart, Home Plus and E-Mart in sourcing and distributing goods. The SSM also hold clear advantages over smaller stores in inventory management, facilities and quality of service.

According to SMBA's plan, a ``chain headquarters'' would be established in each region to manage the collective purchasing of goods, which will provide up to 50 percent of the items sold at the government-brand supermarkets. The headquarters would also operate an online information system to track inventory and distribution.

The government-brand shops will have coffee tables and television monitors for advertisements, and could also be required to use the same signboards and employee uniforms, SMBA said.


Read the rest at the above link.


Wylies99- I say who cares what happens to the smaller stores in Korea? They charge outrageous prices and offer terrible quality and atrocious customer service. The smaller stores DESERVE to go out of business.

I would recommend that EVERY foreigner in Korea shop ONLY at larger stores because that way you won't be charged the "foreigner price" for products. The larger stores, like Lottemart, E-mart, Costco, and Homeplus don't discriminate against foreigners as customers and they offer decent prices and quality.

[Ilsanman]

Maybe with this new brand name will come accountability.

I support small shops if they're competitive. I'd rather not give my entire paycheck to 2 companies.

[coralreefer_1]

Honestly i doubt that many of these mom and pop stores will pass along reduced costs to the consumer. The issue is not that their costs are extremely high, but that more people are opting to buy in bulk on the weekends at the SSM's than they are to buy their needs daily at the mom and pop stores.

People shop at the SSM's because it is cheaper(compared to small stores). Same reason people forgot about all of the "health" concerns over American beef once it came back to Korea. It's all about the money. They may reduce their costs by forming a group and buying in large quantities together, but I don't see it likely that they will pass those savings onto the consumer..and the prices in these stores will not change, and therefore all of their efforts will be a waste, people will still be stocking up at the SSM's on weekends, only going to mom and pops for emergency alcohol/snacks/cigarettes...etc, and some government agency will make a little money on the side.

Reducing their costs will help them, but that is futile if people are not actually shopping there, which is apparent based on their complaints. Reduce their marketing efforts? What efforts? a banner outside?

[oskinny1]

[Ilsanman]

That's why they will never fully die. But they are going to continue to slide and slide, as they can't compete.

[redaxe]

A lot of the little mom-and-pop "supers" carry black market food products that they get from the US Army or something. If you want to see them disappear, good luck finding that stuff.

[earthbound14]

I like the local mom and pop places. Some are shisters, but many are really friendly and sell things far cheapre than the big corporate ones. There was actually a news program a short while ago (in Korean) about how expensive the large stores are compared to the local places. Sometimes as much as twice the price for some items.

I hate E-mart. The local "corner store" (you know those smallish super markets - supa) sells things far cheaper (there is always a discount off the sticker price from the producer - if it's a brand item). Veg is really cheap. It all depends on the shop and the product. I use the local markets and super markets for local products but tend to go to the big chain stores for things like good bread and better prices on nice coffee or even red wine.

The places that charge more are the little 24 convenience stores. If they only sell beer, chips, smokes and a few other items usually only seen in Buy the Way... the convenience stores (pyonwejom). They are more expensive than E-mart.

I think the mom and pop places need some help refining their service too. They don't have the know how or the capital to do what the bigger chains are doing. It is kind of their fault for not offering a better product to begin with, but it is kind of unfair that some companies became so big that they are able to wipe out all the competetion (even if many of them are really good or even better).

[Paul Ajosshi]

I'm not a fan of large supermarkets either. The shopping precinct in my home town in the UK has died a slow and painful death thanks to Tescos and I'm very aware of the threat that E-mart, Costco, Homeplus and the like present to communities and small markets. You may well be able to get some products cheaper at the big stores, but as small businesses fail and markets close you will lose the friendliness and sense of community that can be developed with smaller shops. My butcher knows exactly what cuts I like and doesn't look at me strangely when I ask for large chunks of meat to roast; the vegetable sellers at the local street market give me the same price as Koreans and very often throw in a few extra aubergines or peppers; and the ajumma round the corner always makes sure she has a good supply of my beer of choice.

When I go to E-mart no-one knows me, no-one does me any favours and I get pushed around by aggresive ajummas who like to leave their trolleys in the middle of the aisle.

I'll shop locally for as long as I can, but I know that just like my home town, Korea will suffer from the large supermarkets and the toll they take on the community.

[alphakennyone]

the mom and pops have been more expensive than the 24 hour convenience stores about 50% of the time, in my experience. When they're cheaper, I go for the mom n pops. When they're more expensive, I laugh and get things at 7-11 that are less likely to be expired.

[djsmnc]

What the hell is "the foreigner price" ???

The mom and pops have never done anything worse than tell me I speak Korean well too much.

[Binch Lover]

[saw6436]

HomePlus Express opened across the street from my apartment about 9 months ago. As much as I sympathise with the mom & pop places I do prefer HP Express. Better selection, cheaper, fresher, better service.

If the M&P shops form a collective I say more power to them. Especially if it ultimately benefits the consumer.

[madoka]

[pkang0202]

Back home we had something similar. The local grocers banded together to form a cooperative.

[Jane]

I think we have Walmartification going on in Korea. The smaller stores have more difficulty than before competing on cost, which besides convenience is their advantage.

The one thing that differs between North America and Korea however, is there are still a lot of housewife here, and they prefer to buy their veggies daily from the smaller marts, because it's less of a distance to drag their kids.

This fact notwithstanding, I think we are going to see the demise in the next few years of these supers, and if they are 'super' smart, they will slowly change their business model to reflect the new and up-and-coming Korean society; one where women are working and won't be buying produce daily, and where people will be solely doing smokes or snack runs.

This chain thing they are doing my serve to preserve the super as we know it for a bit longer, but I think it will ultimately be in vain.