"Luxury Waiting Lines as Long as COVID Test Queues"... 'Revenge Spending' Surges Again This Seol

Luxury Love That Doesn't Cool Down This Year
Revenge Spending and Spring Outdoor Activity Preparation
Bonus Spending Demand Joins Forces
Department Store Luxury Sales During Seol Holiday Up 23~30%

"Even if I come out early in the morning and get a front number, there is no guarantee that the product I want will be available. Even after spending time and energy like this, all I am guaranteed is entry, not purchase, but I don’t want to buy it at a raised price with a premium, so I came out."

On the morning of February 2, the last day of the Lunar New Year holiday, a long queue formed in front of a department store in Jung-gu, Seoul, waiting to enter luxury brand stores such as Chanel and Rolex. Although it was before the department store’s opening time, the line kept growing. Online sites sharing information about luxury goods were flooded with posts sharing arrival times and approximate numbers of people waiting at each department store. By the afternoon, entry for the day was closed, and no more entry reservations could be made. Mr. Lee (37), who visited the department store that day, explained, "To be within the first 10 in line during holidays or weekends, you have to come out from the night before, but if you are going to buy something, you come out to buy it as soon as possible. Overnight waiting services by part-time workers are thriving."

Despite daily COVID-19 cases soaring past 20,000 due to the Omicron variant, the wave of 'revenge consumption' centered on luxury goods continues unabated. Especially during this Lunar New Year holiday, which lasted five days, the number of people visiting nearby department stores increased as many stayed home instead of visiting their hometowns, creating a bustling scene at major department stores.

According to the distribution industry on the 3rd, sales at the three major department stores during the five-day Lunar New Year holiday (January 29 to February 2) increased by 7-12% compared to last year’s Lunar New Year holiday (February 10-14, including the day before the holiday). Notably, the luxury category showed remarkable growth rates. Lotte Department Store and Hyundai Department Store saw luxury sales surge by 30.7% and 30.2%, respectively, during this period. Considering that revenge consumption was also rampant in the second year of COVID-19 last year, these are high growth rates. Shinsegae Department Store’s luxury category growth rate was also 23.1%, exceeding the overall average. A department store official said, "The COVID-19 revenge consumption mentality combined with pre- and post-holiday spending sentiment and year-end and early-year bonus spending all contributed. Luxury demand continues to rise, but supply is severely insufficient, intensifying the open-run phenomenon (waiting in line before department store opening)."

During this Lunar New Year holiday, not only luxury demand but also family outings accounted for a significant portion of sales. Holding their children’s hands and visiting department stores, sales in Lotte Department Store’s baby and toy categories increased by 27.4% compared to last year’s Lunar New Year holiday. Shinsegae Department Store’s women’s and men’s fashion sales rose by 14.9% and 18.1%, respectively. Many also prepared early for outdoor activities in the coming spring. Especially with the golf craze that began in earnest last year, Hyundai Department Store’s golf category sales surged by 42.3%, and Lotte Department Store’s increased by 36.4%.

Due to these trends, department store sales are expected to be largely unaffected by the recent spread of COVID-19. The financial investment sector estimated that last month’s department store sales growth rate, considering only existing stores, would exceed 20%. This is attributed to the base effect from strengthened social distancing measures early last year, strong sales of expensive winter clothing due to the severe cold, and increased gift set sales due to the early Lunar New Year holiday. The distribution industry also expects these trends to continue into spring. A department store official said, "As the COVID-19 situation prolongs, the reluctance to visit department stores like before seems to have disappeared. We are closely monitoring the rapid increase in cases due to the Omicron variant and doing our best to maintain quarantine measures."

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