Lotte Group, one of South Korea’s largest conglomerates, is signaling a strategic pivot away from sales-driven expansion as it confronts slowing growth and mounting pressure to improve capital efficiency across its businesses.
At a semiannual meeting of senior executives this week, Chairman Shin Dong-bin told top management that the company’s challenges cannot be resolved without abandoning long-standing management habits built around scale and familiarity. He called for a sharper focus on profitability, faster decision-making and stricter discipline in how capital is deployed.
The message reflects growing strain on Lotte’s sprawling portfolio, which spans food, retail, chemicals and construction. Executives discussed the need to rebalance businesses to restore competitiveness, as uneven performance and heavy investment requirements weigh on returns.
Shin urged managers to move away from revenue growth as the primary benchmark of success and instead evaluate businesses based on return on invested capital. Even projects already under way, he said, should be continuously reassessed and adjusted if their economic rationale weakens—an approach that underscores tighter scrutiny of capital allocation.
By division, priorities included strengthening core brand value in food, adopting location-specific store strategies in retail to lift customer satisfaction, and accelerating restructuring in chemicals in line with government policy while shifting toward higher-margin specialty products. Executives also agreed on the need to reinforce risk-management systems to prevent data-security breaches and safety incidents.
The comments come as Lotte continues to decentralize decision-making following last year’s dismantling of its headquarters structure, a move designed to increase accountability at individual affiliates. Shin told chief executives to balance long-term strategic vision with near-term problem-solving while fostering a corporate culture that allows employees to innovate independently.
He also warned against complacency rooted in past success, cautioning that believing the group is fundamentally different from competitors could obscure changing market realities. Without breaking from familiar practices, he said, the company risks prolonging structural weaknesses rather than resolving them.
The Value Creation Meeting, Lotte’s highest-level management forum, is held twice a year to align groupwide strategy and long-term direction. This week’s session underscored how one of South Korea’s flagship conglomerates is attempting to recalibrate its growth model under increasing pressure to deliver sustainable returns rather than sheer scale.
