Jamsil Homeplus

Homeplus, one of South Korea's leading hypermarkets, temporarily shut down all its stores after July 13 due to financial difficulties. Although Meritz Financial, the major shareholder of Homeplus, agreed to provide emergency funding and Homeplus resumed its recovery efforts, public opinion remains skeptical. With billions of won owed to suppliers and consumer trust damaged, normal store operations seem nearly impossible.

Beyond the crisis of a single brand, the threat of a broader collapse in the hypermarket industry raises numerous concerns, forcing cities and residents to confront the resulting impact on urban spaces and search for sustainable alternatives.

Absence of Hypermarkets: Loss of the Anchor Tenant

Hypermarkets have served as anchor tenants. They do more than just sell everyday groceries; they draw people into an area and direct foot traffic toward nearby shops. Spillover spending, where customers shop at a hypermarket and then use surrounding stores, has been an important source of activity for local businesses.

This is especially true for the Yeongtong station district, home to Kyung Hee University’s Global Campus. Since Lotte Mart in this area had already closed down in September 2024, Homeplus Yeongtong was the only remaining hypermarket and a primary hub for both residents and students. However, with Homeplus now closing its doors, the engine drawing people into the area has virtually stopped.

Park Do-hyun, a student in the Dept. of Genetic Engineering, who lives near Yeongtong station, said, "Besides buying groceries, I often spent time using the cafes, restaurants, and hair salons inside Homeplus." He added, "If Homeplus closes, we lose an everyday space where we could take care of all our needs in one place, going beyond just the inconvenience of grocery shopping."

The absence of an anchor tenant reduces foot traffic and cuts off customer visits not only to the stores inside the mart, but also to nearby local businesses. This weakens the overall vitality of the commercial area and significantly reduces daily convenience for local residents.

Structural Crisis in the Hypermarket Industry

The indefinite shutdown and bankruptcy crisis of Homeplus are accelerating the decline of the hypermarket industry. According to data from the Ministry of Trade, Industry and Resources, overall hypermarket sales dropped by 7.3% compared to the previous year due to the fallout from this crisis. This decline in consumer spending at hypermarkets is increasingly shifting toward online platforms instead of benefiting local small businesses.

Experts view this situation not just as Homeplus’s business failure, but as a structural problem in the changing retail market. Professor Kim Tae-young of the Dept. of Public Administration noted, "Just as hypermarkets replaced traditional markets in the 1980s and 1990s, the overwhelmingly growing online market and convenience stores are now replacing offline stores like Homeplus."

Hong Seul-gi, a student living alone near Chungnam National University, said, "These days, I often shop for groceries through online platforms like Market Kurly, Coupang, and Baemin's B-Mart." She pointed to convenience and price as the main reasons, and added, "Even if I shop comfortably from home, the items arrive quickly early the next morning. When I use coupons and credit card discounts, it's often cheaper than buying at offline stores." Prof. Kim also mentioned, "As the spending habits of students living alone and single-person households shift toward online shopping and global chain convenience stores, the physical space known as the ‘local business district' itself is disappearing."

Rethinking Abandoned Hypermarket Sites as Mega-Compact Cities

Another problem caused by hypermarket closures is the vacant buildings left behind. Unlike regular commercial spaces, hypermarket buildings are massive, making it extremely difficult to find new tenants. These large buildings are often abandoned for years, severely damaging the urban landscape.

Park Do-hyun referred to the vacant Lotte Mart building near Yeongtong station, saying, "That large building is already sitting empty. If Homeplus closes down as well, the neighborhood will feel even more quiet, and fewer people will come around."

Redeveloping such a large site is far from easy in reality, as it must satisfy various conditions such as traffic accessibility, parking capacity, the size of the local consumer base, logistics routes, and municipal permits. Now that online shopping has become the mainstream, simply replacing the site with another traditional offline store will not be enough for it to survive.

Prof. Kim emphasized, "Ultimately, for a large offline space like the Homeplus site to survive, the answer lies in transition into a more sophisticated mega-compact city." He added, "We need to boost our competitiveness through urban redesign—attracting mega-complex facilities like Starfield or Everland to the city center to offer experiences and relaxation rather than simple shopping."

Conclusion

The indefinite closure and bankruptcy crisis of Homeplus are shaking local business districts. However, corporate restructuring efforts alone cannot change the structure of the offline retail market. Local governments and communities must now step away from their reliance on traditional anchor tenants. They need to help local areas become more self-sustaining and quickly find new uses for closed sites, such as redesigning them as multipurpose cultural and experiential spaces.

Ultimately, the Homeplus crisis goes beyond the downfall of an individual company. It signals that local communities must now develop clear solutions for the future of these vulnerable offline spaces.