Cost-savvy shoppers turn to warehouse stores in Korea

(Emart)

Warehouse-style discount stores have seen payment volumes double over the past four years as consumers in South Korea increasingly prioritize value for money amid high inflation, data showed on Sunday.

According to data from WiseApp·Retail, the estimated net payment index for Warehouse club retail stores in December rose to 147.1, nearly twice the level recorded in December 2021. The index compares payment volumes relative to large supermarkets, with December 2021 set at 100.

Over the same period, payment volumes at hypermarkets moved in the opposite direction.

Their estimated net payment index peaked at 122.9 in December 2022, before slipping to 111.4 in 2024 and 87.5 in December last year.

WiseApp’s estimates are based on sample surveys of Koreans’ credit and debit card transactions and exclude cash, bank transfers, and gift card payments.

While supermarkets still account for the second-largest share of retail payments at 26.5 percent, their share has fallen sharply from 33.2 percent in 2021.

Bulk-packaged retail stores, on the other hand, increased their payment share to 10 percent from 7 percent over the same period.

Analysts attribute the shift to structural changes in consumer behaviour.

Wholesale club retailers attract shoppers with bulk purchases and lower unit prices, as online delivery services and quick commerce reduce visits to traditional hypermarkets.

Traders Wholesale Club, a wholesale club chain run by Emart Inc., posted total sales of 1 trillion won ($687 million) in the third quarter of last year. Operating profit for the first nine months rose 27.2 percent from a year earlier.