E-mart to expand into premium LA market
By Kim Jae-heun
The country's largest retailer E-mart is planning to open a new premium facility offering groceries and restaurants in Los Angeles sometime next year, as part of its U.S.-focused business strategy.
For this, E-mart plans to invest 83.7 billion won. “A specific date has yet to be decided but we are planning to open a store in Los Angeles where we will sell various Asian foods,” an E-mart official said.
Specifically, E-mart said it will invest 49.2 billion won and 34.5 billion won in 2021 and 2022, respectively, to establish more supermarkets in the region.
The new grocery brand, temporarily called “PK Market,” will be a six-story complex commercial facility at 712 South Olive Street in the downtown area. It will offer a grocery store and restaurants, allowing customers to dine and purchase food ingredients under one roof.
PK Market is the first direct outlet that E-mart will launch in the United States. Up until now, it has only acquired local food company Good Food Holdings to operate a retail business there.
In December 2018, E-mart spent $275 million to take over the American food company that runs three pre-eminent and enduring food retailing brands ― Bristol Farms, Metropolitan Market and Lazy Acres Natural Market ― in the western U.S. including Los Angeles and Seattle.
E-mart said it does not have plans to open any other facilities in other states “for the time being.”
Early this year, the retail giant acquired another local supermarket chain New Seasons Market to increase its operating stores from 24 to 51 in the United States.
“Investment will be made on establishing a stable business foundation through store renewal,” an E-mart official said.
According to the regulatory filing by the Financial Supervisory Service, E-mart reported 1.28 trillion won in sales from overseas markets for the first nine months of this year. Good Food Holdings' sales during the same period were 1.19 trillion won. Its CEO Neil Stern said in an interview with local media that his company will seek an over 50 percent growth in the next five to 10 years by aggressively expanding stores.
“We're partnering with companies like Instacart and Door Dash, to understand the pickup and delivery market. This puts pressure on us to figure out new and better solutions to serve e-commerce customers,” Stern said.
Meanwhile, E-mart has decided to find a business partner to cooperate with its one and only supermarket store in Go Vap, Vietnam.
Vietnam is its second-largest Asian market after China, and E-mart had big plans to expand its retail business there, expecting to make over 100 billion won in sales this year. However, due to the local government's strict regulations, E-mart decided to abandon its plan to open a second outlet in Ho Chi Minh City.
The retail giant originally intended to invest 200 billion won in the Vietnamese market by the end of this year. E-mart is currently looking for a buyer for its supermarket in Go Vap as well as its unfinished building in Ho Chi Minh City and a 23,000-square-meter property in Hanoi.
The decision came after it suffered heavy losses in China when the Chinese government applied economic retaliation measures against Korean businesses in China after Seoul's decision to deploy Washington's THAAD missile battery system back in 2016.