Grocery supermarkets led the food retail industry in South Korea, with food sales amounting to over 40 trillion South Korean won. Grocery supermarkets have gained popularity by selling locally grown agricultural and livestock products at discounted prices while maintaining quality. Based on the number of units nationally, Hanaro Mart by Nonghyup (National Agricultural Cooperative Federation), was the leading grocery supermarket chain in 2016 with over 2,000 stores. In second place was Lotte Supermarket with around 500 stores nationwide.
Convenience stores have recently been settling down in terms of growth in the South Korean food retailing industry, while other offline retailers, such as discount stores (e.g. E-Mart, Homeplus, and Lotte Mart), have suffered a sharp decline. The proportion of convenience stores’ food retailing was expected to increase by approximately seven percent in 2019. CU and GS25 were the largest players in South Korea’s convenience store market; operating more than 20,000 kiosks nationwide.
The South Korean online food market is growing at an average annual rate of 35 percent. Consumer confidence has also increased as large retail brands and food specialists entered the online grocery market. Food companies have developed logistics and delivery systems as competition in the online market has intensified. For example, Coupang's Rocket Delivery, which enables consumers to receive their products within 24 hours, has led to the increase of the number of consumers who want to buy fresh food online.
Korean consumers are spending more on food each year. Half of the food expenditure was spent on eating out, followed by buying meat, fruit and vegetables. The average basket size of Korean consumers was the largest at discount stores, however, their favorite grocery shopping channel was neighborhood grocery supermarkets where they could easily visit at any time. In addition, the demand for eco-friendly foods using organic and domestic ingredients of Korean consumers is increasing.