Korea's Lotte Mart and Lotte Super combine product sourcing

South Korea's Lotte Mart and Lotte Super will break away from the formats of hyper- and supermarkets and jointly raise the competitiveness of grocery products and operating efficiency by integrating their product sourcing and unifying their product codes.

Both companies on Tuesday jointly hosted the conference for partner companies "The New Lotte Grocery Day" at Lotte Hotel Seoul, sharing their new growth vision, the direction of grocery operations and methods to achieve mutual growth.

Hosted by Lotte Mart CEO Kang Sung-hyun and his Lotte Super counterpart Nam Chang-hee, the event attracted the heads and executives of 100 leading partner companies of both companies including Lotte Shopping Vice Chairman and co-CEO Kim Sang-hyun.

Lotte Mart and Lotte Super seek to make Lotte Shopping's grocery business more competitive through higher synergy via integration instead of separate implementation of product sourcing. This streamlining will prevent task duplication or overlapping and thus lower costs and inefficient personnel use.

Along with sourcing integration, the two sides will also unify their product codes. Previously, it was difficult for the two to create synergy as they used separate codes for the same product, but code unification will allow operations such as integrated ordering, product management and data analysis.

Through their sourcing integration, Lotte Mart and Lotte Super will switch to grocery-only stores in ditching the standardization strategy of raising the competitiveness of grocery products. Instead of dividing outlets into hyper- and supermarket branches, stores will be classified by size and specialize in groceries.

Write to Jong-Kwan Park at pjk@hankyung.com