Recovery Momentum Dampened... Retail Sector on Edge Amid COVID-19 Resurgence

Immediate Impact Based on Confirmed Cases
Offline Store Visits Plummet
Large Mart and Department Store Sales Down 10%

Mixed Fortunes, E-commerce on the Rise
Fresh Food Popularity, Side Dish Products Up 20%
Home Shopping Demand Also Expected to Reflect Changes

[Asia Economy Reporter Seungjin Lee] The daily number of confirmed cases of the novel coronavirus infection (COVID-19) has exceeded 300, intensifying the spread of COVID-19 and putting the offline retail industry on edge. This is because the number of customers visiting stores has sharply declined, causing sales to drop by more than 10% within a week.

Foot Traffic Drops Sharply as Confirmed Cases Surpass 200

According to the retail industry on the 20th, offline stores such as large supermarkets and department stores have seen a sharp decline in sales over the past week as the daily number of COVID-19 confirmed cases exceeded 200. With 'social distancing' raised to level 1.5 in various parts of the country, including Seoul, on the 19th, the number of customers visiting offline stores is expected to decrease further.

From the 16th to the 18th, large supermarkets showed an average sales decline of around 7% compared to the same period two weeks earlier (compared to two weeks prior due to mandatory biweekly Sunday closures). Sales compared to the same period last year decreased by about 10%. Large supermarkets had shown sales at last year's level recently as social distancing was eased to level 1, but the recent surge in confirmed cases immediately impacted sales. Since large supermarkets mainly sell essential daily necessities, the impact of COVID-19 spread has been relatively less severe. Department stores, which mainly handle clothing, suffered a greater blow.

Sales at major department stores from the 16th to the 18th dropped about 10% compared to the previous week. Department stores had been showing signs of sales recovery, with bedding and outdoor goods sales increasing by 30% year-on-year due to an early cold snap in October, but this trend was abruptly reversed. The department store industry is concerned that sales during this period declined by 20% compared to the same period last year, raising fears that the nightmare of the sharp sales drop earlier this year might be repeating.

Market Kurly and SSG.com See Sales Growth

The e-commerce sector, which had been recording high sales daily due to the COVID-19 situation, has recently seen further sales growth. From the 13th to the 18th, when confirmed cases exceeded 200, Market Kurly's sales and sales volume rose by 9% and 7%, respectively, compared to the same period the previous week. Notably, fresh food purchases increased during this period, analyzed as a shift in demand from large supermarkets. Sales of zucchini and bean sprouts increased by 51% and 14%, respectively, while side dishes such as grilled short rib patties and smoked duck recorded sales growth rates in the 20% range.

SSG.com’s early morning delivery from the 13th to the 18th slightly increased compared to the previous week, although it remained at a similar level. Mask purchases also slightly increased, indicating the beginning of the impact of the COVID-19 resurgence. Compared to the same period last month when the daily average number of confirmed cases was in the 60s, order volume and sales rose by 5.0% and 6.4%, respectively.

The home shopping industry is adjusting its programming in response to the surge in confirmed cases. They have newly scheduled lifestyle health products such as masks and hand sanitizers to meet demand caused by the spread of COVID-19. As of the 13th to the 18th, there was no significant change in sales compared to the previous week, but it is expected that some of the decreased demand from large supermarkets and department stores will be reflected.

The retail industry expects that as social distancing is raised to level 2 and the number of COVID-19 confirmed cases increases, the fortunes of offline stores and online channels will diverge even more sharply. This is because, throughout this year, the COVID-19 situation has significantly increased the number of people who previously only purchased goods offline but have now experienced online services.

A retail industry official explained, "After social distancing was eased to level 1, sales increased as some customers who had been using online services began visiting offline stores again. However, as customers’ online experience grows, in situations like the recent one, customers who used to visit offline stores quickly turn to online shopping."

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