The nation’s largest discount store chain E-mart, owned by retail giant Shinsegae Group, suffered dismal sales in the first quarter this year, outpaced by its smaller rival Coupang for the first time, with a gloomy outlook for the rest of the year, according to local brokerage firms Monday.

In the first three months of the year, E-mart posted 13.7 billion won ($10.3 million) in operating profits, a 60.2 percent fall from a year ago. Net profit also plunged more than 90 percent to 2.7 billion won during the same period.

Sales climbed some 1.9 percent to reach 7.1 trillion won, but the figure was lower than 7.4 trillion won posted by Coupang, the New York-listed e-commerce giant. It was the first time for Coupang’s online-only sales to outpace Shinsegae’s sales through extensive distribution channels.

Shinsegae pointed to the cost of renovating two retail outlets as the key factor driving down its overall sales. But analysts pinpointed Starbucks Korea’s lackluster performance as the reason behind the sluggish sales. E-mart owns a 67.5 percent stake in Starbucks Korea as the largest shareholder.

“Even though the company is making efforts to improve its financial flow, no immediate breakthrough is in sight,” said Nam Seong-hyun, an analyst at IBK Securities.

“There are some temporary factors, but (sluggish sales) seem to be the outcome of a structural slowdown within the industry and its strategic decision to improve profitability.”

Nam lowered the target price for Emart shares from 98,000 won to 80,000 won. In a separate report, Kiwoom Securities also lowered the outlook from 87,500 won to 80,000 won.

According to market tracker FnGuide, E-mart is expected to post 4.5 billion won in operating loss in the second quarter following growing costs within the retail industry.