After a Breather in Retail... Sighs Return Amid COVID Resurgence

200+ COVID-19 Cases Over Five Days
Rebounding Consumer Sentiment Falters
Will Level 1.5 Raise to Level 2?
Marts & Department Stores "Weekend Challenge"
Foreign Trade & Hotels Also in Tears

[Image source=Yonhap News]

[Asia Economy reporters Minyoung Cha and Seungjin Lee] Consumer sentiment, which had rebounded led by the government-driven large-scale shopping event 'Korea Sale Festa' (Kosepe), appears to be waning. This is due to the resurgence of COVID-19 infections, with more than 200 new confirmed cases occurring for over five consecutive days. There is also a possibility of gradually raising social distancing measures from level 1.5 to level 2, causing the retail industry to worry that the sales slump experienced in the first half of the year may recur. The faces of self-employed restaurant owners, who had enjoyed a brief boom thanks to year-end company dinners and year-end parties, have also been cast in shadow.

According to the retail industry on the 18th, total sales at a major domestic A hypermarket from the 14th to the 17th decreased by 8.3% compared to the previous year. Sales of fruits, vegetables, and seafood dropped by 7.5%, 6.0%, and 3.2%, respectively. Livestock product sales only rose by 0.2%. In the early stages of the Kosepe event, hypermarket sales had increased by 18% compared to the same period last year.

Department stores are also closely monitoring the situation. Although sales at the three major department stores increased by more than 10% during the first weekend of the winter regular sale from the 13th to the 15th, visitor numbers have been declining since this week (the 16th). In fact, department store B saw a sharp 20.0% drop in visitors over two days from the 16th to the 17th compared to the previous week. Department store C also experienced about a 5.0% decrease in visiting customers. The industry views this weekend (the 21st to 22nd) as a critical turning point.

Restaurant operators, who have barely managed to survive without bearing the high costs of closure, feel even more desperate. Lee Young-eun (pseudonym), who runs a coffee shop in Jung-gu, Seoul, said, "As COVID-19 cases increased, we did not receive a single customer yesterday," adding, "In 17 years, I have never made a loss, but COVID-19 is truly frightening."

The hotel industry, which had expected a 'year-end boom' by resuming buffet operations after the easing of social distancing to level 1, has also been engulfed in tension. For hotels, even if the level is raised to 1.5, there are no immediate restrictions on operations. However, concerns over the spread of COVID-19 may lead to cancellations of various gatherings and events continuing through the year-end.

Major hotels are already accepting reservations for food and beverage venues such as buffets at about half of their capacity, so even if the level is raised to 1.5, operations will not be affected. However, if local infections increase to an average of 200 to 300 cases per day and the level is raised to 2 or 2.5 or higher, suspension of food and beverage operations will be inevitable. At level 2, gatherings and events of 100 or more people are prohibited; at level 2.5, 50 or more; and at level 3, 10 or more.

A retail industry official said, "Recently, with the year-end atmosphere and improving company performances, there was a positive trend, but as COVID-19 spreads again, internal concerns have grown," adding, "Just as we did not neglect quarantine measures when at level 1, we will continue to adhere to customer protection measures even if social distancing is raised."

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