Distribution Industry's 'Cold Wave Boom' Missing... Sales Formula Changes

Strengthened Social Distancing Boosts Home Drinking
Convenience Stores See Record Alcohol Sales Growth
Summer Products Like Ice Cream Also Surge

Winter Cold-Weather Goods Perform Poorly
Hot Pack and Padding Sales Drop as Outings Decline
Retailers Move to Capture Contactless Demand

[Asia Economy Reporter Lim Hye-seon] The cold wave sales formula is changing due to the impact of the novel coronavirus infection (COVID-19). Unlike previous years when the arrival of severe cold increased consumption of clothing such as padding and caused a surge in sales of products like hot packs, hangover remedies, and heaters, this year the cold wave special demand has disappeared. Due to the government's implementation of social distancing level 2.5, people are refraining from going out, and instead of winter accessories and thick clothing, sales of alcohol and food products are booming.

People Seeking Alcohol and Tobacco

According to the distribution industry on the 6th, lifestyle changes caused by COVID-19 have led to changes in people's winter consumption items. Last month, the items with the highest sales growth at convenience stores were alcoholic beverages. According to Seven Eleven data, sales of soju, wine, traditional liquor, and Western liquor increased by 56.3%, 172.7%, 52.6%, and 112.1% respectively compared to the same period last year. CU also saw a sharp increase in sales of soju and wine. This is the result of more people enjoying alcohol at home due to strengthened social distancing and the ban on gatherings of five or more people. As company dinners decreased, sales of hangover remedies, a representative functional health drink product, sharply dropped by 38.7% compared to the previous year.

Statistics from the Bank of Korea also show that expenditure on alcohol and tobacco in the third quarter of last year reached 4.5363 trillion won, the largest scale since related statistics began in 1970. Alcohol and tobacco are representative items whose consumption increases during economic recessions. According to the distribution industry, sales of alcohol and tobacco in the fourth quarter increased further. A distribution industry official explained, "Due to the ban on gatherings of five or more people, consumption of alcohol and tobacco at home continues to increase."

As more people eat at home, sales of side dishes, fruits, and vegetables categories also increased. At CU, vegetable sales increased by 60.2% last month. Mainly purchased items were convenient products such as peeled onions, trimmed green onions, and bean sprouts. Side dishes grew by 12.2%. In addition to easily consumable side dishes like napa cabbage kimchi and jangjorim (soy-braised beef), products needed for cooking such as minced garlic and canned pineapple were sold more than in previous years. Ice cream, a representative summer product, also saw increased sales in winter as people spent more time at home. At Seven Eleven, sales of premium home-type ice cream increased by 63.3%.

Winter Representative Products, Cold Wave Special Demand Missing

While sales of hot packs, a representative winter accessory, declined, sales of outerwear such as padding, a typical winter product, were also sluggish compared to previous years. According to Shinsegae Department Store, outdoor sales from the 21st of last month to the 4th of this month increased by only 4.6% compared to the same period last year. In 2017, the sales growth rate was 20.0%. Sales of sportswear, women's clothing, and men's clothing decreased by 12.0%, 19.4%, and 8.9% respectively. Due to poor clothing sales, overall department store sales also declined. Home shopping reduced padding broadcast programming by more than 15% compared to the previous year, instead increasing the proportion of innerwear and home appliances. However, the luxury padding trend continued, with premium padding demand increasing by 20% compared to the previous year.

The distribution industry is trying to capture non-face-to-face demand as social distancing continues and the cold wave overlaps. Home shopping companies are focusing their fashion product programming on outerwear such as goose down rather than knitwear and pants, and concentrating living product programming on heating products, in response to forecasts of a cold wave with temperatures below minus 20 degrees Celsius starting from the 7th. Lotte Home Shopping will hold a special 100th episode broadcast of its representative fashion program 'Young Style' on the 8th. Due to social distancing, department stores have canceled even the New Year regular sales and are conducting events through online channels. A distribution industry official said, "We expect clothing sales to increase due to the forecast of colder weather this week, but sales are not expected to surge as much as in previous years."

Home appliances show similar trends to previous years. At Lotte Hi-Mart, sales of kimchi refrigerators and heaters increased by 12.0% and 15.0% respectively last month. Kim Jin-ho, store manager of Lotte Hi-Mart Megastore, explained, "Recently, due to health concerns and more people staying at home, the number of customers seeking winter home appliances is increasing."

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