"Must Revive Domestic Market After 100 Closures" vs "Encouraging Infection Risk"

Two Perspectives on Retailers' Sales

Department Stores and Marts Push Ahead with April Sales

Many Partners Facing Zero Sales

Any Chance to Reduce Inventory

To prevent the spread of the novel coronavirus infection, the department store postponed the spring regular sale to April. On the 25th, a department store in Jung-gu, Seoul, opened and started business. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporters Lim Hye-seon, Lee Seung-jin] As large marts and department stores launch large-scale discount events in April, two perspectives coexist: expectations that these will revitalize the sluggish domestic market, and concerns that they might reignite the still subsiding COVID-19 situation.

◆ Department Stores and Marts Closed Over 100 Times Due to COVID-19= On the 25th, the sales plans of large marts and department stores reveal the industry's desperation for survival. Since the outbreak, the number of closures nationwide for department stores and marts has exceeded 100 times over the past 60 days. Due to ongoing social distancing campaigns, store foot traffic has dropped by more than half. Partners with sales close to zero for two months are pushed to the brink. With school openings delayed by nearly a month, supplying school meals has become difficult, causing farmers to face an unprecedentedly tough period. According to a survey conducted by the Ministry of Agriculture, Food and Rural Affairs through local governments, 51 items totaling 406 tons (t) are expected to be affected by the two-week school opening delay.

The reason large marts start their sales on the 26th and department stores from the 3rd of next month is based on this background. A representative from a large mart said, "We fully agree with the government's social distancing policy, but boosting the stagnant domestic market is also important," adding, "We plan to hold discount events with thorough preparations to prevent the spread of COVID-19."

Department stores and large marts are strongly determined to revive consumer demand through these sales events. The spring regular sale at department stores, along with the New Year regular sale, serves as an indicator of consumer sentiment. During last year's spring sale period, sales at Lotte and Shinsegae department stores increased by 6.5% and 7.1%, respectively, compared to the same period the previous year.

Large retailers such as E-Mart will discount agricultural and marine products totaling 233 tons across 41 items. Department stores have focused their promotions during this year's sale period on fashion and accessory brands. Due to the COVID-19 situation, with increased remote work and reduced outings, demand for spring products has disappeared, causing a sharp decline in sales for related brands. Department stores have planned various promotions to help partners recover some of the losses incurred in February and March. In fact, sales of women's and men's clothing and accessories at the three major department stores have worsened over time. Last month's performance was about 70% of the previous year's sales, but this month it has dropped to about half of last year's sales. Especially, fashion brands are struggling so much due to COVID-19 that they are unable to maintain their stores. For example, women's clothing brands such as Handsome, Samsung C&T, Daehyun, and Baba have seen sales plummet by 70-80% this month.

Inventory of Agricultural Products Piling Up Due to School Delays

Discount Events with Stock Received from Large Marts

"Need to Save Retailers on the Brink"

"Large Gatherings Increase Transmission Risk"

◆ Time for the Retail Industry to Act VS Still Too Early= Professor Cho Chun-han of the Department of Business Administration at Gyeonggi Science and Technology University said, "Many are at a crossroads for survival due to the severe consumption slump caused by COVID-19," viewing the retail industry's efforts to stimulate consumption through discount events positively. Professor Seo Yong-gu of the Department of Business Administration at Sookmyung Women's University also said, "The situation is so difficult that there are talks about the end of offline retail," adding, "Considering the jobs of many people affiliated with department stores and marts' partner companies, consumption stimulation is necessary."

However, he advised that retailers need precise and systematic planning. Professor Cho explained, "Since there is a high possibility of COVID-19 spreading among an unspecified number of consumers gathering densely, it is necessary to segment events by age group and time to minimize risk factors," adding, "There is also a phenomenon where only certain product categories show high sales due to COVID-19, so the retail industry needs to consider this as well."

On the other hand, some argue that large-scale events are still premature. Professor Eom Jung-sik, an infectious disease specialist at Gil Hospital, said, "Gathering people in any enclosed space increases the risk of COVID-19 infection," expressing concern that "crowding in large marts and department stores could raise the risk of community transmission." Professor Eom added, "Although I do not know how disinfection is being carried out, since the spread of COVID-19 continues, it is advisable to refrain from events where people gather."

This content was produced with the assistance of AI translation services.