Department Stores vs. Large Marts, Mixed Outcomes of the 'Donghaeng Sale' Effect

Luxury Goods and Apparel Drive Rapid Consumption Increase... Slight Growth for the Three Major Mart Chains

On the 25th, a notice for the 'Korea Together Sale' was displayed at a large supermarket in Seoul. The Ministry of SMEs and Startups held the large-scale discount event '2021 Korea Together Sale' again this year following last year to overcome the COVID-19 crisis and to help small and medium-sized enterprises and small business owners open new sales channels. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Jo In-kyung] Department stores are continuing to post strong sales results during the ‘Korea Together Sale’ event, held to revive the domestic market and promote consumption amid the COVID-19 pandemic. This surge in consumption, centered on luxury goods and fashion apparel, is attributed to the expansion of vaccinations and growing expectations for economic recovery.

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According to the distribution industry on the 6th, Hyundai Department Store’s sales from June 24, when the Together Sale and summer regular sale began, to July 4 increased by 21.7% compared to the same period last year.

Luxury goods sales surged by more than 50% year-on-year due to revenge spending caused by the prolonged COVID-19 pandemic and a preference for overseas luxury brands. Women’s fashion grew by 41.2%, and men’s fashion by 33.7%. Compared to the same period in 2019 before the pandemic, sales increased by an impressive 27.5%.

Shinsegae Department Store also saw sales rise by 16.0% over 11 days since the start of the Together Sale compared to the same period last year. Luxury goods sales increased by 31.2%, while women’s and men’s fashion sales rose by 11.7% and 9.8%, respectively.

Compared to the pre-COVID period, total sales during this time grew by nearly 30%, and luxury goods sales more than doubled. A Shinsegae official explained, "Herm?s opened at the Daegu branch at the end of last year, and Chanel opened in March this year. The ongoing increase in luxury consumption since last year contributed to the significant sales growth."

Lotte Department Store also reported a 15.5% increase in sales during the Together Sale compared to the same period last year. Overseas luxury goods sales grew by 19.6%, men’s fashion by 18.1%, and women’s fashion and accessories by 12.3%.

Large Supermarkets Remain Stagnant

Unlike department stores, the three major large supermarkets saw only a slight increase of 1-2% in sales during the same Together Sale period compared to last year. This is attributed to many consumers shifting massively to other distribution channels such as e-commerce, reducing dependence on supermarkets.

A large supermarket official said, "Since fresh foods, processed foods, and daily necessities are regularly featured in planned promotions and discount events, consumers did not feel a significant effect from the Together Sale."

Meanwhile, according to data from the Ministry of SMEs and Startups, online sales through planned events during the week of June 24-30 reached 5.8 billion KRW, TV home shopping sales were 33.9 billion KRW, and live commerce sales were 700 million KRW, totaling 40.46 billion KRW in sales through non-face-to-face channels.

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