"For the Hard Days..." Retail Industry Booms with Reward Spending

Golden Holiday, Outlet Sales Surge

[Asia Economy Reporter Lim Hye-sun] Amid several months of a consumption cliff due to the impact of the novel coronavirus infection (COVID-19), the retail sector smiled brightly for the first time this year during the golden holiday (April 30 to May 5). This was the result of compensatory consumption behavior coinciding with Family Month. Suburban outlets were bustling with people. Department stores also attracted crowds looking to purchase luxury goods and home appliances.

According to the distribution industry on the 6th, sales at outlets and department stores increased compared to the same period last year during the holiday. This marks a growth trend for the first time in about 100 days since January 20, when COVID-19 confirmed cases first appeared. The recovery in sales was most significant at outlets. During this period, total sales at six Lotte Premium Outlets increased by 23.5%. Sales increased year-on-year in all categories except accessories: women's (14.0%), men's (20.0%), food (15.0%), home appliances (43.0%), and overseas luxury goods (34.0%). A Lotte official explained, "During the holiday period, suburban outlets were so crowded that nearby roads were congested," adding, "Since social distancing was still in effect, people tended to head to suburban areas." Hyundai Premium Outlets also saw a 21.3% increase in sales during the same period. In particular, the Gimpo and Songdo locations saw sales surge by 31.1% each.

Department stores also felt the warmth. During the same period, total sales at Shinsegae, Lotte, and Hyundai Department Stores increased by 7.5%, 3.2%, and 2.6%, respectively. The consumption trend focused on home appliances and luxury goods was consistent across all three companies. Sales of home appliances at Shinsegae, Lotte, and Hyundai Department Stores rose by 40.1%, 34.0%, and 23.9%, respectively. Luxury goods sales also grew by 23.5%, 22.0%, and 20.3%, respectively.

As social distancing measures eased, people enjoying outdoor sports also opened their wallets. At Shinsegae Department Store, sales of outdoor brands increased by 27.3% compared to the same period last year. At Hyundai Department Store, golf brand sales rose by 15.9%. The Children's Day special was also enjoyed. Sales in the children's category at Shinsegae, Lotte, and Hyundai Department Stores increased by 16.8%, 10.4%, and 9.5%, respectively. However, the response to the women's fashion category remained lukewarm. Sales in the women's category at all three companies decreased by more than 10.0% compared to the same period last year.

The distribution industry expects that with the implementation of "everyday social distancing (daily quarantine)" starting from this day, pent-up consumption will spread. Professor Seo Yong-gu of Sookmyung Women's University said, "As the number of new COVID-19 confirmed cases decreases, people feel relieved, and consumption sentiment is recovering," adding, "Although global uncertainty remains high, pent-up consumption sentiment is expected to explode, leading to increased consumption of premium products."

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