E-mart to close down premium grocery store PK Market

By Kim Jae-heun

E-Mart CEO Kang Hui-seok / Courtesy of E-Mart

E-mart, the country's largest retailer, is closing down its premium grocery store brand PK Market just five years after its launch.

“Beginning 2019, we started reorganizing our specialty store businesses towards profitability and efficiency. Closing down our PK Market at Starfield shopping complexes in Hanam and Goyang is part of the plan,” an E-Mart official said.

PK Market is a special grocery store chain that sells imported high-end food products. The products sold there are more expensive than those available in ordinary supermarkets, but cheaper than what's on offer at SSG Food Market, E-Mart's premium grocery store chain. E-Mart had also introduced a new concept called “grocerant” at PK Market that combines a grocery store and a restaurant.

However, COVID-19 forced people to purchase food online or shop at big-box retail stores offering big price discounts, which caused PK Market to suffer declining sales.

E-Mart appointed Kang Hui-seok as its CEO in March 2020 who has been leading a business reshuffle, expanding profitable specialty stores and closing down money-losing shops. As a result, PK Mart shut down its first branch in Wirye in March, followed by the two in Hanam and Goyang, all in Gyeonggi Province.

Instead, E-mart built more of its proprietary No Brand stores and expanded electronic appliance specialty store Electro Mart branches in the country.

No Brand achieved a profit in the first quarter of last year and has posted surpluses for seven-consecutive quarters as of this October. Electro Mart also increased its number of branches from 44 in 2019 to 55 this year. This helped E-mart reduce its losses in the specialty store business from 86.6 billion won ($73.29 million) in 2019 to 34.6 billion won ($29.28 million) in 2020 and 7.8 billion won ($6.6 million) as of the third quarter of this year.

“We are seeing prominent results from our strategy to terminate specialty stores that are not making profits nor growing their business. Our overall sales volume at specialty stores has increased and operating profit is continuously improving,” an E-Mart official said.