T-Cafe at Traders' Suwon Hwaseo store. [E-mart]
T-Cafe at Traders' Suwon Hwaseo store. [E-mart]

As high prices and weak consumer sentiment weigh on the hypermarket industry, E-mart is pushing a value-for-money strategy to win back customers. The retailer recently introduced T-Cafe — the food and beverage brand from its Traders warehouse format — at a regular E-mart store for the first time, and opened the first standalone outlet of Wow Shop, its ultra-low-price lifestyle goods brand.

E-mart opened T-Cafe on Thursday at its Jungdong branch, marking the brand's first appearance outside a Traders location, according to industry sources. T-Cafe sells pizza, rice noodles, coffee and other items at low prices. Its signature item is a large 45-centimeter pizza priced at 16,800 won ($12) to 18,800 won, with individual cheese quarter-slices available for 4,500 won. A rice noodle dish topped with half a domestic chicken sells for 6,500 won, while an Americano goes for 1,000 won and soft-serve ice cream for 2,500 won.

E-mart appears to be using T-Cafe's value appeal to keep shoppers in stores longer and lift core sales at once. According to E-mart, T-Cafe's sales last year rose 18.5 percent from the year before, and the number of customers grew 10 percent to 28 million. Sales in the first half of this year were up 18.4 percent from the same period last year, extending the growth streak.

E-mart plans to bring T-Cafe, which has already proven its appeal at Traders, into regular stores to reach more customers. "There are no confirmed plans for additional openings at this time," an E-mart official said, adding that the company would review the Jungdong branch's performance and customer response before deciding on next steps.

E-mart is also investing in Wow Shop, its flat-price lifestyle goods brand where everything costs 5,000 won or less — a price range that overlaps with Daiso, the dominant household goods chain. E-mart first launched Wow Shop at its Wangsimni branch in December last year. Last month, it opened the brand's first large standalone store at the Eunpyeong branch. Wow Shop started with four stores in December last year and now operates 13 locations.

E-mart is also putting its private-label products front and center, including No Brand, to attract budget-conscious shoppers. Its private-label brand 5K Price, which focuses on items under 5,000 won, has surpassed cumulative sales of 35 million units. Sales in June were up about 88 percent from August last year, the month the brand launched. The lineup currently covers about 360 products, with plans to expand to roughly 500 by year's end.

E-mart's value push comes as the broader hypermarket sector struggles to find a way forward. According to retail sales data released by the Ministry of Trade, Industry and Energy, hypermarket sales fell 7.3 percent in the first half of this year compared with the same period last year — a stark contrast to department stores, which grew 20.1 percent, and convenience stores, which rose 3.7 percent. In June alone, department store and convenience store sales climbed 22.2 percent and 5.1 percent, respectively, while hypermarket sales dropped 10.5 percent. By product category, hypermarket sales of non-food items such as clothing and accessories fell 6.7 percent, while food sales plunged 12.8 percent.


korean@heraldcorp.com