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| Workers at E-mart Traders prepare store opening in Nowon-gu, northern Seoul, in this 2019 photo file. / Yonhap |
By Kim Jae-heun
Shinsegae Group Vice Chairman Chung Yong-jin has reacted to the COVID-19 pandemic well, while his sister Chung Yoo-kyung, vice president of Shinsegae, has failed to do so.
The country's largest retailer E-mart, an affiliate of Shinsegae Group, recorded its largest sales in the first quarter following a surge in online shopping as many people remained housebound to prevent the spread of the coronavirus
E-mart reported an operating profit of 48.4 billion won on sales of 5.21 trillion won in a Q1 regulatory filing Wednesday, the largest since it split from Shinsegae Group in 2011.
However, while sales increased 13.6 percent compared to the same period last year, the operating profit declined by 34.8 percent, after nearly 30 E-mart stores were forced to temporarily shut down after people infected with COVID-19 visited the stores.
Growing revenue coming from the warehouse style E-mart Traders and online shopping mall SSG.com were also behind E-mart's improved sales performance.
"E-mart was able to improve its sales amid COVID-19 due to strong marketing from the grocery sector and continuous growth of Traders. Our specialty stores also secured a healthy profit to help E-mart succeed," a company official said.
The work-from-home policy created a heavy buying trend here that benefited E-mart Traders. The warehouse store's revenue and operating profit increased 21.8 percent and 22.4 percent, respectively, compared last year.
E-mart's specialty store "No Brand" that offers low-priced items ranging from food to daily necessities also recorded its first surplus of 2.5 billion won since being offered in 2015.
SSG.com was successful in increasing total sales to 917 billion won in the first quarter, up over 40 percent compared to 2019, while reducing its deficit to under 20 billion won.
The local securities industry predicts E-mart's retailing performance will grow, in addition to SSG.com, with more sales from its offline stores.
"E-mart's fulfilment and fresh center infrastructures are unrivaled in the field and its offline business is getting through the tough time," researcher Park Jong-dae at Hana Financial Investment said.
Meanwhile, Shinsegae's total sales in the department store and duty free sectors recorded 1.19 trillion won a decline of 21.1 percent, while operating profit plummeted 97 percent to 3.3 billion won compare to the same period last year.
"We were struck hard by COVID-19. Our department store has beefed up our online business while increasing quarantine efforts in our offline outlets to minimize the loss," a Shinsegae official said.
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