'1,000 Confirmed Cases' Weekend, Luxury Consumption Decreases... All-in on Survival Spending

Department stores see decline in luxury sales... Only home-related living sales increase
Large marts also see increase only in fresh food sales
E-commerce sales surge on SSG.com, Lotte On, etc.
Home shopping sales share rises from 6 PM to 11 PM
Convenience stores see increased alcohol sales near residential officetel areas

[Asia Economy Reporters Hye-seon Lim and Seung-jin Lee] As the number of confirmed cases of the novel coronavirus infection (COVID-19) surpassed 1,000, the performance polarization among distribution companies is intensifying. It has been a week since Seoul implemented the '9 PM shutdown' measure amid the 'third wave of COVID-19,' but the transmission speed is accelerating. The government is also considering implementing Level 3 social distancing, which is expected to make the offline distribution sector face a gloomier year-end. If Level 3 is enforced, large-scale stores under the Distribution Industry Development Act, such as department stores and large supermarkets, will have to close.

People Avoiding Multi-use Facilities... Luxury Goods Sales Also Declined

According to the distribution industry on the 14th, sales at multi-use facilities such as department stores and large supermarkets over the past weekend (13th-14th) decreased by more than 8% compared to the same period last year. Sales during the one week after the '9 PM closing' was implemented (5th-11th) dropped by more than 2%. A distribution industry official explained, "The number of confirmed COVID-19 cases surged rapidly, and snowfall also reduced the number of people going out on weekends," adding, "In the case of large supermarkets, although there were quite a few shoppers on Saturday the 12th due to overlapping mandatory closure days, sales still declined compared to previous years."

Shinsegae, Lotte, and Hyundai Department Stores saw their weekend sales decrease by 12.4%, 14%, and 8.8%, respectively. Even luxury goods demand, once considered a 'COVID-19 safe zone,' declined. While luxury goods sales increased by 23.3% from the 5th to the 11th, they contracted over the past weekend. Restaurant sales plummeted by 44.4%. Apparel sales, which had briefly increased last month, fell again after just one month. As people spent more time at home, sales of home appliances increased by 16.1%.

The situation was similar for large supermarkets. Only food sales such as fresh produce showed single-digit growth. On the 12th at 8 PM in Seoul, only the food counters holding closing sales at Emart Wangsimni branch were crowded, while other sections were deserted well before closing time. Large supermarkets that shortened their operating hours by two hours promoted 'dramatic discounts' to attract customers, but it was insufficient to bring sales back to previous levels. A large supermarket official said, "Sales from 9 PM to 11 PM account for about 10% of total sales, so the impact was not significant, but weekend customer numbers dropped by more than 20% compared to the previous week."

Shift to Contactless Shopping and Nearby Convenience Stores

Consumption quickly shifted to online shopping such as 'early morning delivery' and nearby convenience stores. In the case of SSG.com, sales from the 5th to the 11th increased by 14.7% compared to the previous month. Over the past weekend, orders surged further, increasing by 24.4% compared to the previous month. The order completion rates for SSG Delivery and Early Morning Delivery were 99.6% and 96.1%, respectively.

The category with the largest sales increase during this period was grocery (food products). Grocery sales increased by more than 50% compared to the same period last month, with high order volumes mainly for processed foods that can be stored long-term. This was influenced by anxiety over the prolonged spread of COVID-19. Additionally, demand for meal kits and essential groceries such as meat and eggs rose due to increased demand for ready-to-eat meals.

Orders also surged on Lotte ON. Especially after large supermarkets shortened their operating hours to 9 PM and with a growing reluctance to visit crowded offline stores, more customers purchased products sold at Lotte Mart online.

Lotte ON's sales from the 5th to the 11th increased by 15.8% compared to the previous month, with Lotte Mart Mall sales rising by 43.7%, driving overall sales growth. Total order volume also increased by more than 30%. Even more orders were placed over the weekend of the 12th-13th. During this period, Lotte ON's total sales rose nearly 40% compared to the previous month, influenced by overlapping demand for online grocery shopping and year-end gift purchases. Demand also increased on platforms like Market Kurly and Oasis, to the extent that order closing times were moved earlier.

Home shopping sales also improved during evening hours. Lotte Home Shopping's sales share from 8 PM to 11 PM increased by 9.4%. It appears that home shopping usage increased before bedtime as evening plans after work were canceled. Examining the main sales items (based on order amount) during this period, mask sales increased 18-fold due to heightened interest in infection prevention and health. Health foods such as protein and probiotics increased by 80%. As people spent more time at home, sales in furniture categories like sofas and beds rose by 104%, and sales in home appliance categories such as vacuum cleaners and kimchi refrigerators increased by 28%.

Convenience store sales in residential and officetel-dense areas also increased by more than 20%. Sales in academy districts and entertainment areas decreased by an average of 10%. Alcohol sales surged notably. Over the past weekend, Seven Eleven saw wine, liquor, and soju sales increase by 154.5%, 61%, and 32.45%, respectively, exceeding sales from the 5th to the 11th. At CU, rice and wine sales increased by 75.6% and 29.5%, respectively. A convenience store official stated, "Due to the spread of COVID-19 over the past weekend, people refrained from outdoor activities, leading to noticeable sales increases in key products located in residential areas compared to the previous week," adding, "The culture of grocery shopping at nearby convenience stores is spreading, with high sales indices for staple ingredients such as rice, flour, cooking oil, vegetables, and alcoholic beverages."

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