Abstract

Small grocery stores and supermarkets in Seoul are losing customers to convenience stores and Super Supermarkets. Many of them are driven out of business because they are experiencing huge decrease in sales and profits in recent years. Seoul Logistics Center (SLC) was opened in 2013 to help small grocery stores and supermarkets by reducing various steps of commodity flows, hence offering lower prices to them. The central government of Korea and Seoul Metropolitan Government (SMG) co-funded the SLC. SMG has aslo helped SLC on facilities improvement ever since the establishment of SLC.

However, SLC cannot meet its expectations. Less than 4 percent of small grocery stores and supermarkets purchase commodities from SLC because it does not offer proper commodity bundles at lower prices. In addition, there are some other problems associated with the way how SLC manages its business. As a result, it has huge losses every year from the very beginning.

This study tried to figure out the current situation of SLC and the problems that SLC faces in wholesale business and logistics of groceries with the ultimate goal to find appropriate short-term, mid-term, and long-term strategies. First of all, short-term directions to get more sales and positive profits are suggested. Next, the questions of who is an appropriate agent to run SLC and where is a good place for SLC are dealt with. Finally, we recommended SLC to play a role as a wholesaler in a voluntary chain of retailers such as groceries and small supermarkets in the long-run.

 

Contents

01 Introduction

1_Background and Purpose of the Study

2_Main Contents and Research Methods

 

02 Current Situation and Problems of Seoul Logistics Center

1_Local Logistics Centers by SMBA of Central Government

2_Current Situation of Seoul Logistics Center

3_User Satisfaction Survey for Seoul Logistics Center

4_Problems that Seoul Logistics Center is facing

 

03 Grocery Stores and Small Supermarkets in Seoul

1_Seoul Logistics Center, Grocery Stores, and Small Supermarkets

2_Businesses of Grocery Stores and Small Supermarkets

3_Trends of Grocery Business and Expansion of Convenience Stores

 

04 Domestic and Foreign Benchmarking

1_Suwon Logistics Center

2_Wholesale Business in U.K. and Japan

 

05 Directions for Running Seoul Logistics Center

1_Basic Directions for Seoul Logistics Center

2_Short-term, Mid-term, and Long-term Strategies