"Escaping Home Confinement" Department Stores and Outlets Take Off... Online Sales Stall

Department Stores' April Sales Growth Rates All Exceed 20%
Lotte and Hyundai Outlets Also Jump 30%
Increase in Outdoor Activities Like Outings... Outdoor and Fashion Sales Surge
Online Sales Growth Rate Slows After Rapid Expansion During COVID Period

Customers visiting Shinsegae Simon Busan Premium Outlets are waiting in line to ride the carousel, a playground facility.

Since the social distancing measures due to COVID-19 were lifted last April and the reopening (resumption of economic activities) began in earnest, the atmosphere in the distribution industry has also changed. As the number of people engaging in outdoor activities increased significantly, offline retailers such as department stores and outlets saw their sales soar, especially in outdoor and fashion categories, while online retailers that experienced rapid growth during the pandemic have seen their growth rates decline.

According to the distribution industry on the 2nd, the sales growth rates of the three major offline department stores all exceeded 20% in April. Shinsegae Department Store's sales in April increased by 28.8% compared to the same period last year. With more people participating in outdoor activities, sales of golf wear (59.3%) and outdoor products (46.4%) surged, and as many companies returned from remote work to office work, sales growth rates of men's fashion (33.9%) and women's fashion (32.0%) also exceeded the average. Lotte Department Store's sales also jumped 25% during the same period. Sales of athletic wear (55%) and golf, outdoor, and leisure products (40%) related to outdoor activities showed remarkable growth. Hyundai Department Store also saw a 20.2% increase in sales during this period, with high-margin product categories such as men's fashion (29.0%) and women's fashion (28.7%) significantly increasing compared to the same period last year. With the full recovery of daily life, color cosmetics (25.5%) also showed a high sales growth rate. The sales growth centered on these categories continued into May.

As the number of suburban excursionists increased significantly, outlet sales also rose sharply. Lotte Outlet's sales growth rate in April reached 30%. Athletic wear sales more than doubled, and the sales growth rate of golf, outdoor, and leisure products (50%) was also notable. With the significant increase in the number of visitors to suburban outlets, food and beverage (F&B) sales also jumped by more than 55%. Hyundai Outlet's sales rose 30.0%, centered on outdoor (65.5%), golf (41.3%), and men's fashion (41.7%). Shinsegae Outlet also saw a 20% increase in weekend vehicle entries in April compared to the same period last year, indicating more visitors, which translated into higher sales. Shinsegae Simon stated, "In May, on sunny weekends, the number of visiting vehicles is more than 20% higher," adding, "Shoppers combining suburban outings with shopping continue to visit."

On the other hand, online retailers that grew rapidly during the COVID-19 period have seen their growth rates decline. As the weather warmed and social distancing was lifted, crowds poured outside, and home shopping also struggled. Although online retailers maintained growth in April, their growth rates dropped sharply compared to offline retailers. According to the Ministry of Trade, Industry and Energy's 'April Major Retailers Sales Trends,' the sales growth rate of online retailers in April this year (compared to the same period last year) was 11%, down 5.5 percentage points from 16.5% in April 2021. The sales growth rate of offline retailers in April this year was 10.2%, which is lower than online growth but the decline from 11.2% in April 2021 (1.0 percentage point) was smaller than that of online retailers.

Home shopping also posted relatively poor results in April. A home shopping official said, "Except for some channels strong in fashion, the performance in April, when reopening began in earnest, was not good, and a similar atmosphere continues in May," adding, "With sunny weather and the lifting of social distancing, those who used to enjoy TV home shopping while staying at home have started engaging in outdoor activities."

The financial investment industry forecasts that the growth rate of the e-commerce sector in the endemic (periodic infectious disease outbreak) era will be between 9% and 13%. Considering that the sector recorded an average annual growth rate in the 20% range over the past two years, this is a relatively low level. The online industry appears to be reorganizing its ranks after rapid growth during the COVID-19 period, which raised the baseline. An e-commerce industry official said, "Consumers who got used to convenient online shopping during the COVID-19 period will not easily change their shopping patterns," but added, "Preparing for the endemic era, we are strengthening membership programs to lock in customers and enhancing differentiated competitiveness by creating specialized zones by category."

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