Social Distancing Easing Expected to Lead to a 'Slight Recovery' in Retail Market in Q2

KCCI Retail Distribution Business Outlook Index at 99... Up 3 Points from Previous Quarter

Citizens shopping at a department store in downtown Seoul on the 1st. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The retail distribution industry's Business Sentiment Index (RBSI) for the second quarter was recorded at 99, marking the third consecutive quarter below the baseline of 100. A figure below the baseline indicates that more companies view the economy negatively than positively.

According to the second-quarter retail distribution industry business sentiment index data released by the Korea Chamber of Commerce and Industry on the 10th, the second-quarter RBSI rose by 3 points from 96 in the first quarter to 99. This means that for three consecutive quarters?last year's fourth quarter and this year's first quarter?more companies have viewed the economy negatively than positively.

2nd Quarter Retail Business Survey Index (RBSI) by Industry Type. (Source: Korea Chamber of Commerce and Industry)

By business type, the clear trend of "online strength and offline weakness" seen during the COVID-19 pandemic has reversed. Online shopping, which had been above the baseline since the first quarter of last year, dropped to 96. Conversely, offline platforms such as department stores rose to 111, up 9 points from 102 in the first quarter. Supermarkets jumped from 82 to 99, large discount stores from 88 to 97, and convenience stores from 85 to 96.

Regarding the rebound of department stores, the Korea Chamber of Commerce and Industry explained, "The increase in demand for luxury goods, efforts to attract new brands, along with the customer attraction effect from store renovations and the effect of new store openings, were analyzed as factors driving the index upward."

Seo Deokho, Director of the Distribution and Logistics Promotion Institute at the Korea Chamber of Commerce and Industry, stated, "With warmer weather starting this month and expectations for reopening, consumer sentiment is expected to improve," but emphasized, "It is also necessary to continuously increase investments to provide future growth engines and new shopping environments."

The second-quarter RBSI is the result of a one-month survey conducted from February 24 to March 21 among 1,000 retail businesses in seven major cities nationwide.

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