**Seoul**: Homeplus supermarket is contending with supply instability following a court-led rehabilitation process amid liquidity concerns. Stock shortages have been reported in various product categories as the company tries to regain supplier trust while promoting sales during its peak promotional period.
Homeplus, a prominent supermarket retail chain in South Korea, is navigating a challenging landscape marked by supply instability following its recent court-led rehabilitation process. The company entered this process amid liquidity concerns, leading to empty or poorly stocked shelves at various stores during a critical sales period.
The turmoil began when several partner firms that provide goods to Homeplus suspended and later resumed their supplies over the weekend after the company filed for receivership. In an effort to gain the confidence of its suppliers, Homeplus is emphasising its commitment to a stable financial future. Despite these assurances, stock shortages have been noted particularly in the food, beverage, and hygiene product aisles, triggering worries about potential impacts on sales.
Reports from Homeplus locations indicate that supply issues persist. At a Homeplus Special store in Dongdaemun District, Seoul, shelves meant for popular items such as HiteJinro’s Kelly’s beer and Dongsuh Foods’ Maxim coffee were notably lacking stock as of Sunday afternoon. Other products, including Ottogi’s instant rice and Nongshim’s instant noodles, also faced shortages, some sections remaining entirely empty.
A Homeplus store in Pohang, North Gyeongsang Province, experienced similar challenges, especially as shoppers rushed to take advantage of promotional offers initiated the previous week. A visitor noted that many shelves remained inadequately stocked despite the high volume of foot traffic. Issues were replicated at another Homeplus location in Seoul’s Mapo District, with instant noodles, snacks, and frozen dumplings among the items in short supply.
In a bid to tackle the supply disruptions, Homeplus disclosed that certain partners have resumed deliveries, including prominent names such as CJ CheilJedang, Ottogi, and Nongshim. Furthermore, the company managed to settle outstanding bills for suppliers whose deliveries had been halted, promising a return to normalcy. Delayed payments were also made to Lotte Wellfood and Samyang Foods, facilitating the resumption of their supplies.
However, discussions remain ongoing with other suppliers, including Lotte Chilsung and Dongsuh Foods, who are yet to decide on the continuation of deliveries. These suppliers have expressed apprehension about Homeplus’ cash flow capabilities in the immediate future. This anxiety is compounded by the extensive payment period for invoices, which ranges from 45 to 60 days—double that of competing supermarket chains.
Despite uncertainty surrounding its financial outlook, Homeplus claimed that sales during its promotional event from February 28 to March 3 had increased by 5 per cent since last year, reaching record levels for discount events. The company has indicated that it has resumed payments on commercial bonds which were previously halted and currently possesses over 300 billion won (approximately $207 million) available for operational needs. Homeplus anticipates an additional cash influx of a similar amount from sales this month, which it asserts will be sufficient to repay all outstanding debts.
The situation remains dynamic as the company continues to engage with its supply partners, seeking to reassure them of its stability and capacity to maintain its extensive network of 127 stores nationwide.
Source: Noah Wire Services
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