[Heatwave Economics] Distribution Industry Thaws Amid Scorching Heat

Shopping Malls, Supermarkets, Department Stores All Smiles
Convenience Foods, Electronics, Ice Cream Sales Soar
Meat Restaurants See Sharp Drop in Customers... Dining Table Prices Set to Rise

[Asia Economy Reporter Lim Hye-seon] As the daytime high temperature exceeds 30 degrees Celsius, continuing the 'June scorching heat,' people's economic activities are changing. To escape the heat, people flocked to indoor shopping malls, department stores, and marts with air conditioning running coolly, and ice and beverages sold like hotcakes at convenience stores. Summer home appliances such as air conditioners and fans recorded record-high sales. On the other hand, restaurants specializing in meat and traditional markets saw a sharp decline in customers due to the hot weather, deepening their worries.

People Seeking Indoors to Escape the Heat

According to the distribution industry on the 23rd, customers visiting Emart last weekend (19th-21st), when the temperature rose to 32.7 degrees, increased by 10% compared to the previous month. If the heatwave continues, many people seek cool indoor spaces, benefiting large retail companies. On August 1, 2018, when Seoul recorded the highest temperature of 39.6 degrees since weather observations began on October 1, 1907, more than 200,000 people visited Lotte World Mall for the first time. The next day, August 2 (37.9 degrees), the number reached 210,000, setting the highest weekday record since the mall opened. The average daily weekday visitors in the first half of the same year was 110,000. As people flocked, sales also surged.

Analysis of summer product trends at a department store last year showed that when the temperature exceeded 30 degrees, sales increased mainly during lunch and dinner hours. By category, sales of sushi, cold noodles, and salads increased in restaurants and food sections, while demand for pizza, pasta, and stews decreased. Sales of easy-to-cook meals like meal kits and diet foods increased, whereas bakery items (cakes) and rice cakes sales declined. Additionally, sales concentrated on traditional summer products such as air conditioners and lifestyle goods. Many purchases were made by people who stopped by just to escape the heat without any particular purpose. By age group, visits from senior customers in their 50s and 60s and family groups increased. Senior customers mainly purchased jewelry, parasols, home appliances, and tableware, while family groups mainly bought water play items.

Department Stores, Marts, and Convenience Stores 'Special Demand'

With the start of the heatwave, the distribution sector is smiling for the first time in a while. From the 19th to the 22nd, when the heat continued daily, Shinsegae Department Store's total sales grew by 9.9% compared to the same period last year. By category, sales of luxury goods, lifestyle items, golf apparel, and outdoor wear increased by 54.6%, 39.6%, 20.5%, and 18.6%, respectively. Hyundai Department Store also saw a 5.2% increase in sales. Sales of summer home appliances such as air conditioners and fans surged early. According to Lotte Hi-Mart, sales of circulators and fans in the recent week (14th-21st) rose by 185% and 50%, respectively, compared to the same period last year. At Lotte Department Store, air conditioner and fan sales increased by 28% and 62%, respectively, compared to the previous year. Shinsegae Department Store also saw a 43.2% increase in home appliance sales. At convenience store GS25, sales of salads, bagged ice, cup ice, and iced beverages increased by 115.0%, 66.0%, 42.6%, and 29.4%, respectively. Seven Eleven also saw sales of premium ice cream and ice increase by 37.0% and 12.5%, respectively.

Some places are frowning due to the early arrival of the heat. Traditional markets and meat restaurants, which are heavily affected by the weather, have seen customers drop sharply. At Seoul's Mangwon Market, visitors have halved since last weekend. Mr. Park, who sells vegetables at Mangwon Market, lamented, "As it got hotter, fewer people visited the market compared to previous years," adding, "I sold less than half of the stock I brought today." Meat restaurants were also hit hard by the heatwave. Near City Hall Station, only three tables were occupied even during dinner hours. Mr. Lee, who works there, said, "There were few customers due to COVID-19, and now with the heat, customers are not coming," adding, "It seems customers avoid the heat from grilling meat."

Due to the heatwave, prices of some agricultural products are rising, showing signs of increasing food costs. According to the Korea Agro-Fisheries & Food Trade Corporation (aT), lettuce, which is vulnerable to heat, suffered poor growth due to high temperatures, and as of the 22nd, its price was 19,460 won (medium grade, 4 kg), up 62.7% compared to a month ago. Prices of spinach (medium grade, 4 kg) and cucumbers (10 pieces) also rose by 68.1% and 30.9%, reaching 14,260 won and 6,820 won, respectively.

[Image source=Yonhap News]

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