Small Business Sales Hit Worst Peak and Show 'Recovery'... Holiday Consumption Recovery Expected

Source: Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] Sales of small business owners, which had been depressed due to the spread of the novel coronavirus infection (COVID-19), are gradually recovering. Consumption is expected to increase further during the bridge holiday (April 30 to May 5).

According to the 'Small Business Sales Survey' announced by the Ministry of SMEs and Startups on the 29th, since the survey began on February 3 this year, traditional markets hit their lowest point on March 23 (65.8%), and small business owners on April 6 (69.2%), then started to rebound.

The rate of decrease in sales at traditional markets steadily increased from February 3 (20.8%), February 17 (31.7%), March 9 (58.9%), to March 23 (65.8%), but eased to 55.8% on April 27. The rate of decrease in sales for small business owners also rose from February 3 (20.8%), February 24 (43.1%), March 9 (57.9%), to April 6 (69.2%), but showed a recovery trend to the 50% range as of April 27 (56.7%).

This survey was conducted by the Ministry of SMEs and Startups from February 3 to April 27, targeting about 300 small business establishments and 220 traditional markets.

A trend of easing sales decline is observed across all regions. As of the 27th of this month, the week-on-week changes in sales decrease rates by region were Gangwon (△20.9 percentage points), Jeju (△19.2 percentage points), Seoul (△13.4 percentage points), Gwangju·Honam (△9.3 percentage points), Busan·Ulsan·Gyeongnam (△8.8 percentage points), Daegu·Gyeongbuk (△4.3 percentage points), Gyeonggi·Incheon (△3.8 percentage points), and Daejeon·Chungcheong (△3.3 percentage points).

In particular, Jeju and Gangwon regions, which had suffered from a decrease in tourists, recorded a clear recovery. Additionally, sectors such as tourism, leisure, accommodation, and education services, which had experienced large sales declines, also showed signs of easing. However, some industries like restaurants showed slower recovery.

As of April 27, the week-on-week changes in sales decrease rates by industry were tourism·leisure·accommodation (△15.4 percentage points), processed foods and general retail (△9.5 percentage points), agriculture·livestock·fishery products (△5.7 percentage points), education services (△5.0 percentage points), clothing·shoes·cosmetics (△0.8 percentage points), and restaurants (0.2 percentage points).

The Ministry of SMEs and Startups emphasized that recent sales analyses by other research institutions also confirm a warming in the small business economy. According to data analyzed by Korea Credit Data based on credit card usage performance, self-employed sales hit their lowest point (70.1% compared to the same month last year) during the week of February 24, but recovered to about 92% compared to the same month last year by the week of April 20.

In response to the sales recovery trend of small business owners shown in this survey, the Ministry of SMEs and Startups plans to revitalize domestic demand, which had been depressed due to COVID-19, and promote support measures for small business owners. According to the ministry, the requests from small business owners to the government were financial support (61.5%), tax support (29.6%), goods support (18.1%), and quarantine support (12.2%) in that order.

Minister Park Young-sun of the Ministry of SMEs and Startups said, "Small business owners are the most affected whenever there is a national crisis," and added, "Naturally, the fruits of economic recovery should go most to small business owners." Minister Park emphasized, "We will help small business owners turn the COVID-19 crisis into an opportunity. We are preparing measures to reboot Korea for the upcoming great transition to the digital economy."

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