Lotte Shopping targets $752 mn in operating profit by 2026
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Lotte Shopping made its announcement while hosting the “CEO IR Day” at Lotte Hotel Seoul in Jung District, Seoul on Tuesday, the first time since 2010 that the retail company has held an event outside of its regular investor relations (IR) events with its vice chairman personally explaining its mid to long-term vision to institutional investors. The company posted sales of 15.48 trillion won and an operating profit of 386.2 billion won in 2022.
“While we are focused on improving profitability and efficiency this year, we will make customer-centered values our core management philosophy and become the first shopping destination for customers this year,” Lotte Shopping vice chairman and co-chief executive officer Kim Sang-hyun said. “Based on our six core strategies, we will give it our all to hit 1 trillion won in operating profit by 2026 hand-in-hand with our employees.”
Lotte Shopping’s core strategy centers on regaining its reputation as the top shopping destination by creating synergies across business units. The company aims to go beyond quantitative growth based on sales expansion and aggressively enter new businesses by utilizing Lotte Group’s tangible and intangible assets, with key strategies including re-establishing market leadership in core shopping areas, becoming the nation’s top grocery store, optimizing e-commerce business, and promoting partnership with Ocado Group, turning around underperforming business units, expanding business in Southeast Asia, and transforming into a retail tech company. These strategies show the company’s commitment to strengthening the competitive edge of its offline stores and creating new revenue streams by fostering retail technology.
Lotte Shopping plans to renovate eight major stores located in core shopping districts, including its main branch as well as those in Jamsil and Suwon. Starting with the opening of the Songdo store in 2026, it will continue building new shopping malls in regions including Busan, Gwangbok, and Daegu. It also presented plans to strengthen its offline grocery stores, which have an edge over e-commerce.
“Last year, we secured a stable profit structure through the integrated operation of Lotte Mart and Lotte Super,” a Lotte Shopping official said. “In the second half of this year, we will open a new type of store that offers a special customer experience and specialized products.” In the overseas business, the company plans to focus on growing Lotte Mall Westlake Hanoi, which will open in Hanoi, Vietnam this month, while its affiliates including Lotte Himart Co. and Lotte Home Shopping Inc. will enhance customer service to improve efficiency.
The company is also expected to generate new revenue sources through retail tech. For its e-commerce business, Lotte Shopping will use its partnership with British retail tech company Ocado Solutions established in 2022 to build six smart logistics centers by 2030 as part of its efforts to boost profitability. It also plans to use its customer platform Lotte Members Co., which boasts 42 million members, and 12,000 offline stores to link artificial intelligence technology with its retail business. “We will generate new revenue streams through new business-to-business (B2B) transactions such as data commerce,” according to Lotte Shopping. “We will develop an integrated media platform business that provides personalized advertising solutions by converging data assets with advertising technology.”
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