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Retail business survey index for Q4 falls below 100 again, gov't plans Korea Grand Festival in response

Published: 08 Oct. 2025, 15:51 Updated: 08 Oct. 2025, 16:54

Customers look at eggs on display at a supermarket in Seoul on Oct. 2. [YONHAP]

No year-end shopping spree for Korea — the country’s retail outlook for the fourth quarter turns bleak as negative consumption sentiments continue, according to the latest data.

According to the Korea Chamber of Commerce and Industry (KCCI) on Wednesday, the retail business survey index (RBSI) for the fourth quarter came in at 87. The index is based on a survey of 500 retail and distribution companies. A reading below 100 indicates that more businesses view the retail market less optimistically than in the previous quarter.

In the third quarter of 2025, the RBSI reached 102 — up 27 points from the previous quarter’s 75 — marking the first time in four years the index exceeded 100. But that optimism proved to be short-lived, with the index quickly reversing course. The KCCI cited a combination of factors for the decline, including the slowing economy, sluggish domestic demand and intensifying competition across retail sectors.

By category, only department stores recorded an RBSI above 100 at 103. The uptick was attributed to seasonal year-end demand and a wealth effect driven by a recent rebound in the stock market, which may boost spending on luxury goods.

Other sectors — including online shopping (87), supermarkets (83), convenience stores (83) and large discount stores (81) — all fell below the benchmark. In the online sector, intensified competition and the growing presence of low-cost Chinese platforms weighed on expectations. Supermarkets struggled with the rise of online grocery shopping and a continued regulatory burden. Last month, a parliamentary committee passed a bill extending a regulation banning supermarket-style chain stores near traditional markets — originally set to expire in November — by four more years.

Convenience stores saw the sharpest decline from the previous quarter’s 108. The sector is facing a seasonal dip in foot traffic, coupled with challenges such as oversaturation and rising labor costs. Large discount stores, meanwhile, are grappling with fierce price competition and were excluded from the Lee Jae Myung administration’s state-issued consumption coupon program — a move seen as another drag on the sector.

The Gyeongdong Market in eastern Seoul is filled with shoppers on Oct. 3. [JOONGANG ILBO]

In response, the government plans to launch the nationwide Korea Grand Festival from Oct. 29 to Nov. 9 to help revive consumer sentiment. The large-scale shopping event will include 30,000 participating businesses. Regional gift certificates will be offered at discounts ranging from 12 to 20 percent while digital Onnuri gift certificates will be available at 15 to 25 percent off.

Additional measures include a new “win-win lottery” campaign offering 2 billion won ($1.4 million) in prizes for 5,000 winners, as well as credit card cashback programs and special discount events hosted by public and private food delivery apps.

“To fundamentally boost consumer sentiment, Korea needs to support digital transformation for small retailers, reform outdated regulations in line with global standards and build up AI infrastructure to expand both growth potential and purchasing power,” said Park Kyung-do, the chair of the Korea Distribution Association and a professor at Sogang University.

Lee Hee-won, the head of the KCCI’s Distribution and Logistics Promotion Center, added, “The economy runs on sentiment. With the outlook for the fourth quarter leaning negative, proactive policy measures are essential to turn the tide.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NA SANG-HYEON [[email protected]]