Retailers do well as the Sales Festa event helps
According to the Ministry of Trade, Industry and Energy on Wednesday, the revenue of retailers in November rose 7.5 percent to 11.9 trillion won ($10.2 billion). That is the sharpest increase since May this year, when growth was also 7.5 percent.
Department store revenue rose 3.1 percent compared to the previous year, while convenience store revenue rose 4.6 percent.
The combined revenue of the department stores detailed in the study - Lotte, Hyundai and Shinsegae - greatly contrasted the performance of the three major discount stores - Emart, Homeplus and Lotte Mart - for which revenue grew at 0.8 percent.
Supermarkets owned by conglomerates last month experienced a decline compared to the previous year.
“The offline retailer revenue increase was largely the result of the shopping events in November, including the Korea Sales Festa,” said a ministry official.
The increase in sales at department stores came as a surprise as there have been growing concerns over the lack of participation from major companies as well as a lukewarm response from consumers to Korea’s Black Friday.
The government not only moved the date of the sales event from September and October in previous years, but the sales event period was also doubled in duration, to run more than 20 days to encourage more consumers to participate.
One of the reasons for the relative lack of interest was the size of the discounts, which are not as deep as those offered during Black Friday in the United States and China’s Singles’ Day.
The one-month-long sales event was first introduced during the Park Geun-hye administration in 2015 to encourage consumers to spend after consumption dropped sharply that year due to the public’s fear over the Middle East Respiratory Syndrome, which claimed 38 lives and resulted in the quarantine of 12,208 people.
Despite concerns, aggressive sales on popular overseas brands have helped boost overall revenues.
Overseas brand sales were up 22 percent, while household appliances sold at department stores rose 18.1 percent.
The government study found that online retailers are becoming increasingly important.
Online retailers, such as shopping mall platforms, now generate 44.1 percent of the country’s retailer revenue. That’s up from last year’s 41.3 percent.
BY LEE HO-JEONG [email@example.com]