Korean retail giants focus on strategic planning during Chuseok

Chairman Shin Dong-bin

Despite sluggish domestic demand and economic challenges in South Korea, the heads of major retail and food corporations are expected to spend the upcoming five-day Chuseok holiday focusing on their management strategies for the remainder of 2024.

With domestic industries grappling with high inflation and interest rates, these chief managers are likely to concentrate on ways to improve profitability and navigate their companies through the tough times.

Industry sources reported on Friday that Lotte Group Chairman Shin Dong-bin will visit the grave of the group’s honorary chairman Shin Kyuk-ho in Ulsan, a tradition he has upheld during holidays and other significant occasions. Once he has paid his respects, Shin is expected to remain in Korea to deliberate on business strategies for the second half of the year, including site visits to key business operations in both Korea and Japan.

As the economic recession deepens, Shin is expected to place particular emphasis on profitability improvements and investments in new growth drivers. His key focus recently has been the integration of Lotte’s Korean and Japanese operations into a “One Lotte” team to better tackle the economic downturn. Shin and executives from Lotte’s food subsidiaries in both countries visited food production sites in Belgium and Poland earlier in September 2024, discussing ways to strengthen global competitiveness through synergy. They also designated Lotte’s Pepero snack as the first “One Lotte” strategic product, aiming to develop it into a top 10 global brand with 1 trillion won ($750 million) in annual sales by 2035.

For his part, Shinsegae Group Chairman Chung Yong-jin, who was promoted to group chairman in March 2024, is also set to spend Chuseok quietly with his family while contemplating the company’s future strategies. Chung has practiced “immersive management” since his promotion, adhering to a strict daily schedule with minimal external activities. His primary focus for the second half of the year is improving profitability, particularly in turning around the performance of core subsidiaries such as E-Mart.

Chung’s efforts have been reflected in the group’s ongoing cost-cutting measures and organizational restructuring. These efforts contributed to Emart’s turnaround to operating profit in the first half of 2024, and Chung is expected to continue these initiatives through the remainder of this year. Another key issue on the horizon is Shinsegae’s executive reshuffling, anticipated for late October or early November.

CJ Group Chairman Lee Jae-hyun is also expected to spend Chuseok reflecting on future business strategies. Lee has been urging CJ employees to maintain a sense of urgency, emphasizing that the group’s growth has stalled. His “Only One” philosophy, aimed at securing a competitive edge, will likely guide his decision-making as he looks to overcome the current economic uncertainties.

Hyundai Department Store Group Chairman Chung Ji-sun will also spend the holiday quietly, focusing on refining his company’s strategies for the second half of the year. Hyundai’s department stores have seen slowing sales growth, and key subsidiaries, including the duty-free business and Zinus, are also experiencing downturns, adding pressure to the decision-making process.

Neither Shin Dong-bin nor Chung Yong-jin are expected to join President Yoon Suk Yeol’s upcoming economic delegation to the Czech Republic later in the month. Similarly, their participation in the ASEAN economic delegation set for October also remains uncertain.