Retail sales for last year the worst since 2004

Retail sales in Korea grew at their slowest pace in eight years in 2012, data showed yesterday, indicating that consumers tightened their belts in the face of cloudy economic conditions.

Sales at department stores, large-scale supermarkets, convenience stores and other retailers totaled 309.1 trillion won ($284.9 billion) last year, up 3.3 percent from a year earlier, according to the data from Statistics Korea.

The growth rate was the slowest since 2004, when sales expanded 3 percent year-on-year and slower than the 3.9 percent gain in 2009 in during the heart of global financial crisis.
The rate adjusted for inflation grew 1.8 percent, compared to 4.3 percent expansion in 2011, the data showed.

By sector, sales at department stores increased 5.4 percent year-on-year to 28.5 trillion won in 2012, but that was less than half of the 11.4 percent gain the previous year, according to the data.

Large-scale marts logged 37.5 trillion won in sales last year, up 2 percent from a year earlier. It was also much slower than the 8.1 percent and 9 percent gains reported in 2010 and 2011.

Convenience stores, however, posted better sales figures.

Their combined sales came to 10.2 trillion won, up 18.2 percent from a year earlier, the steepest growth since 2003 when sales rose 22.9 percent, the data showed.

The decrease in retail sales could be blamed on economic uncertainties, which are causing consumers to be cautious with their money.

Korea’s economy grew 2 percent last year, the slowest in three years, the central bank said earlier.

The last time the economy grew below 2 percent was in 2009 when it expanded 0.3 percent.

The central bank expect the economy to grow 2.8 percent this year.

Yonhap