[Edaily Marketin LEE GEON-EOM Reporter] As Homeplus enters bankruptcy proceedings, expectations are growing that competitors such as E-MART Co., Ltd.(139480)and Lotte Mart will benefit from the situation; however, analysts suggest it is unlikely to lead to a full-fledged recovery in the industry. They explain that while these companies may enjoy short-term improvements in their business environment due to a shift in consumer demand, the structural limitations of the hypermarket business—driven by intensifying competition from e-commerce and other sectors—remain unchanged.

According to industry sources on the 3rd, the Seoul Bankruptcy Court decided that day to terminate Homeplus’s corporate rehabilitation proceedings. If Homeplus does not file an appeal within 14 days or if the appeal is dismissed, the company will enter full-scale bankruptcy proceedings.

Han Shin Rating assessed that Homeplus’s exit from the market will provide some short-term relief to existing large supermarket operators. The agency explained that since the intensity of competition has eased somewhat since the initiation of corporate rehabilitation proceedings—leading to an improvement in performance, particularly at E-MART Co., Ltd. and Lotte Mart—additional benefits from attracting customers are expected if store downsizing and closures gain momentum in the future.

However, Han Shin Rating assessed that the likelihood of this leading to medium- to long-term industry recovery is low. This is because the current improvement is merely a short-term effect resulting from the redistribution of market share; the growth of the hypermarket sector itself has slowed due to rising online penetration rates, trends toward local and small-quantity purchases, and ongoing operational regulations. In particular, even the food sector—which accounts for around 70% of hypermarket sales—is seeing its demand base significantly weaken due to intensifying competition from e-commerce, corporate-owned supermarkets (SSMs), and convenience stores.

Amid this environment, major hypermarkets are each exploring different survival strategies. In fact, E-MART Co., Ltd. is streamlining its existing discount store operations while restructuring its business portfolio to focus on “Traders,” its highly profitable warehouse-style discount store.

Although Traders currently operates only 24 stores—representing just 15% of E-MART Co., Ltd.’s total store count—it has established itself as the company’s core profit driver, generating 25% of sales and 60% of operating profit in the hypermarket segment (discount stores + Traders) last year.

LOTTE SHOPPING CO., LTD.(023530), on the other hand, is overcoming the limitations of the domestic market by expanding its overseas operations in countries such as Indonesia and Vietnam. As of the end of last year, LOTTE SHOPPING CO., LTD. was operating 63 discount stores overseas. Through this strategy, the company is generating profits that exceed those of its domestic business and serving as a strong medium- to long-term growth engine that helps mitigate earnings volatility.

Kim Young-hoon, a research fellow at Han Shin Rating’s Industry Division 2, explained, “In conclusion, it is unlikely that Homeplus’s exit will lead to a structural recovery across the entire hypermarket sector.” He added, “In the medium to long term, the key factor determining each company’s performance will not be the market void left by Homeplus itself, but rather how effectively they can translate their differentiated growth strategies—while maintaining the customer base secured during the market restructuring process—into tangible results.”

He added, “Given that the growth potential of the sector as a whole is limited, continuous monitoring of each company’s response strategies and their implementation results will be necessary going forward.”