COVID-19's Impact on Retail... Convenience Stores and Department Stores See Overseas Brand Sales Decline After 3 Years and 9 Months

Ministry of Industry Announces March Sales of Major Retailers
Offline Down 17.6% YoY, Online Up 16.9%

[Asia Economy Reporter Moon Chaeseok] As the novel coronavirus infection (COVID-19) spread, non-face-to-face (untact) consumption increased, dealing a direct blow to offline retailers such as convenience stores and department stores. The sales decline was the largest in 3 years and 9 months, and notably, overseas famous brands in convenience stores and department stores showed a sales decrease for the first time during the same period.

On the 28th, the Ministry of Trade, Industry and Energy announced that a survey of last year's sales trends of 26 major online and offline retailers showed that sales of 13 offline retailers decreased by 17.6% compared to the same month of the previous year. Although sales of 13 online retailers increased by 16.9%, total sales decreased by 3.3%.

Offline retailers suffered a severe blow from COVID-19. Sales shrank by as much as 17.6%, marking the largest decline since the statistics were reorganized in June 2016.

The number of purchases also decreased by 17.4%. Although the unit purchase price by business type rose, the overall offline purchase unit price (sales amount/purchase count) decreased by 0.2% due to sales declines in relatively expensive stores such as department stores.

An official from the Ministry of Trade, Industry and Energy explained, "Due to the spread of COVID-19, consumers refrained from going out and avoided multi-use facilities, and with school openings postponed, related demand decreased, causing a sharp drop in sales."

Most companies, except for Super Supermarkets (SSM), saw sales declines. SSM sales increased by 5.5%, but department stores (-40.3%), large discount stores (-13.8%), and convenience stores (-2.7%) experienced sales decreases.

Convenience store sales decreased by 2.7%. This marked the first sales decline in 3 years and 9 months since June 2016. The postponement of school openings and closure of academies led to decreases in processed foods such as snacks and beverages (-3.1%) and ready-to-eat foods such as lunch boxes and sandwiches (-14.5%).

Department stores also saw sales declines across all product categories, including overseas famous brands (-19.4%), women's casual wear (-58.7%), and men's clothing (-51.3%), as consumer visits to stores decreased due to social distancing measures. The total sales decline was as much as 40.3%. Overseas famous brands showed a sales decrease for the first time since the statistics were reorganized.

Large discount stores experienced decreased demand for outing-related items such as automotive products, sports goods, and clothing, resulting in sales declines in clothing (-50.6%), sports (-41.4%), and home & living (-20%). Overall sales also decreased by 13.8%.

On the other hand, SSM sales increased by 5.5%. Due to the postponement of school openings and telecommuting, demand for home meals and snacks increased, boosting consumption of fresh and prepared foods (17.9%), processed foods (5%), and agricultural, fishery, and livestock products (3.1%), resulting in a 7.1% increase in food consumption.

Online sales showed the exact opposite trend. As consumers preferred non-face-to-face transactions due to the COVID-19 situation, online purchases of daily necessities increased. Sales of food (75.4%) and living & furniture (33.3%) increased, leading to an overall sales increase of 16.9%.

However, due to social distancing creating an atmosphere of refraining from outings and travel, sales of outing and travel-related product categories such as fashion & clothing (-6.5%) and services & others (-25.1%) decreased.

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