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South Korea retail conglomerate opened a new format for its Emart brand, called the SSG Food Market, in Seoul.
South Korean’s largest retail chain Emart snatched up US food retailer Good Food Holdings for $275mn.
California-based Good Food operates 24 stores under three banners: Bristol Farms, Lazy Acres and Metropolitan Market. With this acquisition, Emart will gain 12 Bristol Farm’s stores, five Lazy Acre’s and seven Metropolitan Market stores. This is Emart’s first foreign acquisition. Good Food’s executive board will be retained.
“We are not planning to make any changes in the management of Good Food Holdings,” said an Emart spokesman. “Nothing in the operations of the three grocery chains will change in the immediate future.”
The acquisition of Good Food sees Emart break into the US market in a big way. It intends to provide the retailer with stability and allows it to expand operations in North America. In October, Emart made an announcement to open a premium grocery store, called PK Market, in Los Angeles next year. PK Market will be in direct competition with a nearby Whole Foods Market store.
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South Korea’s FTC (Fair Trade Commission) approved a set of voluntary rules agreed by convenience store operators to better protect struggling franchisees.
Five members of the Korea Association of Convenience Store Industry, CU, GS25, 7-ELEVEN, MINISTOP, C-SPACE and Emart24, came up with a voluntary agreement to curb excessive competition.
A key centerpieceof the agreement is that stores of rival brands should be at least 50 metres away from each other. This is the first time the convenience stores have set the minimum distance since 2000.
FTC’s approval will see the voluntary agreement to be applied to to 96% (38,000) of convenience stores nationwide.
The number of convenience stores has risen sharply to at least 40,000 last year, driven by an increase of single-member and two-people households.
Kim Sang-jo, chairman of the FTC, said the regulations could ease saturation and prevent reckless new openings in areas where there are already many existing stores.
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South Korean discount chain operator Emart signed an agreement with the local retailer Robinsons to launch two of its private labels in the Philippines.
Under the agreement, Robinsons will set up and operate 25 Emart “No Brand” and 25 “Scentence” stores by 2020. No Brand sells daily necessities and food items. Scentence is Emart’s beauty brand. Emart will be paid a licencing fee and profit from the export of products to the stores.
This deal sees the Emart business expands from the Central Asia (two Emart stores in Mongolia) and the Middle East (one Scentence store in Saudi Arabia) to South East Asia.
Around 70% of No Brand goods are manufactured by local small enterprises in South Korea. The brand has been so successful that stand-alone No Brand stores have been opened.
The launch of No Brand stores in the Philippines will be its first overseas expansion. According to Emart, outbound shipments of No Brand products jumped by 57.8% year-on-year during January to October this year.
Emart says it plans to develop Scentence beauty products that fit well with the climate of the Philippines to in order to boost its competitiveness.
“The deal to launch No Brand and Scentence in the Phillipines is meaningful to us in that it diversifies our global portfolio for specialized stores,” said Lee Joo-ho, who heads Emart’s global business.
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Shinsegae Group vice chairman Chung Yong-Jin has provided more details on its plans to open PK Market, an upscale version of Emart, in Los Angeles.
The announcement comes as Emart looks to expand its global business, opening stores in Vietnam, Mongolia and Cambodia. Vice chairman Chung said that opening stores in Vietnam has been slow due to tight regulations. The retailer is now looking to focus on more developed markets such as the US.
Different to Emart, PK Market will mainly stock premium products. The store in Los Angeles is to introduce Asian products to American shoppers in old-fashioned market ambience that reminds them of the 1950’s and 1960’s-style traditional markets. Products will range from Korean cuisine to Japanese, Chinese, Indonesian and Thai dishes.
The PK Market store will be at 712 Olive Street in downtown Los Angeles. Shinsegae will lease the first three floors of the building. The first two floors will be retail space, whilst the third floor will be used for offices. This will put PK Market in direct competition with Whole Foods Market, which has a nearby market that is only one block away at the corner of 8th Street and South Grand Avenue. “…the location will be next to Whole Foods Market to attract shoppers to come to our store …” Chung told reporters.
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