"Only the Same Snacks on Display" Homeplus Supply Halved... Empty Shelves Ahead of Lunar New Year Sales Season

Supplier Deliveries Restricted Amid Liquidity Crisis
Shortened Settlement Periods and Supply Based on Payment Status
Stark Contrast with Rivals Expecting Lunar New Year Gift Set Boom
Worsening Situation with Unpaid Wages and Overdue Bills

#A distribution company supplying livestock products to department stores and large discount stores recently reduced its supply volume to Homeplus by about 40–50% compared to before. This decision was made due to concerns that it might be difficult to receive payments on time because of worsening liquidity. On February 2, a representative from a supplier stated, "Previously, Homeplus would settle payments about 30 to 40 days after delivery, but recently, we only supply limited quantities that can be settled within 10 days." The representative added, "Ahead of the Lunar New Year, Homeplus requested the supply of popular beef gift sets with a condition that payment would be made within 2 to 3 days, so we are supplying only limited quantities of set products, depending on the payment situation, instead of supplying individual cuts."

A processed food shelf at a Homeplus store in the metropolitan area is filled with Homeplus private brand (PB) products. Photo by Heungsun Kim

While offline distribution channels are ramping up their gift set offerings and launching aggressive discount promotions ahead of the Lunar New Year, the atmosphere at Homeplus is quite different. At a Homeplus store in the Seoul metropolitan area, the shelves for fresh foods with short shelf lives—such as fruits, vegetables, and fish—were filled with supplier products, but most other product categories were stocked with Homeplus's own private brand, "Simplus," filling the gaps.

Simplus products were concentrated in major grocery categories like milk, snacks, and beverages, while national brand (NB) products were only occasionally seen among processed foods with relatively longer shelf lives. A store representative explained, "Perhaps due to payment issues, product supply has not been smooth, so except for items already in stock, private brand products have been used to fill the empty spaces for quite some time." Even when products are brought in with difficulty, customer traffic has decreased compared to before, so each store is encouraging purchases through 1+1 promotions or additional discounts. In the meat section, there was a notice about a 30% discount on domestic pork belly compared to the regular price, along with an additional 10% discount offered only on weekends.

One Year Since Homeplus Entered Corporate Rehabilitation... Delayed Salaries and Unpaid Social Insurance

As of March 4, it will be one year since Homeplus filed for corporate rehabilitation, and the company's financial situation is reaching its limits. Salaries, which had been paid on the 21st of every month, were split into two payments in December last year, and the salary for last month—the first payday of the new year—has not yet been paid. A Homeplus official said, "Not only salaries, but also the annual bonuses that were paid a week before the Lunar New Year will definitely not be given this year, so employees are very concerned." The official added, "Some employees who urgently need living expenses are canceling savings accounts or seeking personal loans, but even this is difficult because the company has not paid the four major social insurance premiums on time."

Homeplus and its largest shareholder, private equity fund operator MBK Partners, have so far proceeded with the closure of 17 stores, separated and sold the supermarket (SSM) division, and submitted a rehabilitation plan to the court that includes closing 41 underperforming stores over the next six years. On January 27, they announced a voluntary retirement program for managers at the deputy general manager level and above. In addition, MBK Partners agreed to provide 100 billion won in emergency debtor-in-possession (DIP) financing and requested 100 billion won each from its largest creditor, Meritz Financial Group, and state-run Korea Development Bank, for a total of 300 billion won in support. However, these institutions have not agreed to the request.

A supplier representative commented, "Homeplus says that if emergency operating funds are injected, there will be no problem with normal operations such as payments, but with salaries, taxes, and utility bills already significantly overdue, it is questionable how effective this will be." The representative added, "Partner companies will have no choice but to continue supplying products in a limited manner while watching how the situation unfolds."

A notice announcing the suspension of operations is posted at the Homeplus Gyesan branch in Gyeyang-gu, Incheon. Yonhap News

Intensive Restructuring in the Corporate Rehabilitation Plan... Labor Union Conflict as Well

As liquidity pressures on the company reach their peak, the voices of employees—now divided into two groups—are sharply at odds. Currently, there are two Homeplus labor unions: the Homeplus branch of the Korean Confederation of Trade Unions’ Mart Industry Union and the General Union. Last month, the Homeplus General Union announced that 87% of employees supported the restructuring-focused rehabilitation plan. The employee representative body, Hanmaeum Council, also agreed with the General Union, stating, "We fully recognize the crisis facing the company, and although painful decisions and hardships will be necessary to implement the rehabilitation plan, we completely agree that this is the last chance for Homeplus to recover."

In contrast, the Homeplus branch of the Mart Industry Union has stated that it cannot accept the management's rehabilitation plan, arguing that it is effectively a liquidation plan. Starting February 3, Ansuyong, head of the Homeplus branch of the Mart Industry Union, has announced that he will begin another hunger strike, following a previous one in November last year.

This content was produced with the assistance of AI translation services.