Expectations Rise for Retail Recovery Including 'Open Run' Department Stores... Q3 RBSI Index at '106'

Department Store 107... Largest Increase
Online Shopping 115, Convenience Store 100, Hypermarket 98

[Asia Economy Reporter Hwang Yoon-joo] The Retail Business Survey Index (RBSI) for the retail distribution industry exceeded the baseline (100) for the second consecutive quarter. Consumer sentiment, which had been subdued due to COVID-19, is expected to enter a full recovery phase with the expansion of vaccination.

On the 6th, the Korea Chamber of Commerce and Industry conducted a survey of 1,000 retail distribution companies on the '2021 3rd Quarter Retail Distribution Industry Business Outlook Index,' which was recorded at '106.' An RBSI above 100 means that more companies view the retail distribution business outlook for the next quarter positively compared to the previous quarter, while a value below 100 indicates the opposite.

◆ Department Stores Show Largest Increase Due to Growth in Luxury Goods and Interior Sales = By business type, department stores (96→107) showed the largest increase. Large discount stores (98), convenience stores (100), and supermarkets (96) all rose by 3 points compared to the previous quarter, maintaining expectations for economic improvement. Online shopping (115) showed the highest figure among business types and is expected to continue its upward trend in the third quarter.

Department stores (107) rose 11 points from the previous quarter and are expected to lead the full-scale economic recovery. In particular, the increase in sales of high-priced items such as luxury goods and imported clothing, driven by vaccination and the easing of social distancing, is expected to gain further momentum in the third quarter as outdoor activities resume. Additionally, the steady increase in sales related to living, furniture & home appliances, and interior design, driven by the home economy trend, also boosted economic expectations.

Convenience stores (100) are also expected to maintain their upward momentum. With the easing of social distancing measures, operating hours for multi-use facilities such as restaurants and cafes in the metropolitan area were extended from 10 PM to midnight, which is expected to increase convenience store sales as well. The news that schools will return to normal operation from the second half of the year also positively influenced the index rise.

Large discount stores (98) rose 3 points from the previous quarter, approaching the baseline (100), while supermarkets (96) recorded the lowest outlook among business types.

Online shopping (115) significantly exceeded the baseline (100) again this quarter. Despite the expansion of offline consumption due to increased vaccination, various business models such as online grocery shopping, mobile gifting, and live commerce have already become an integral part of daily life, fostering optimism for the future outlook of online shopping.

◆ "Cost Reduction is Top Priority"... Department Stores and Large Discount Stores Aim to Overcome COVID-19 by Strengthening Digital Competitiveness = When asked about their response to changes in the business environment after COVID-19, 71.7% answered that they had 'responded.'

The measures taken were promotion enhancement (46.6%), strengthening online business (46.1%), cost reduction (30.7%), and product assortment enhancement (28.8%), in that order.

As for key management tasks currently being pursued or planned, cost reduction (23.6%), sales expansion (19.4%), strengthening digital competitiveness (15.3%), and expanding sales channels (13.4%) were cited in sequence.

By business type, offline representatives such as department stores (35.2%) and large discount stores (23.2%) most frequently selected 'strengthening digital competitiveness,' whereas convenience stores, supermarkets, and online shopping more often chose sales expansion (34.3%), cost reduction (29.9%), and expanding sales channels (26.1%), respectively.

Measures to stimulate consumption included economic stimulus (31.4%), price stabilization (15.6%), tax reduction (10.2%), job creation and alleviation of employment insecurity (9.6%), and expansion of price discounts/promotional events (8.6%).

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