Bagel and Dessert Hotspots Receiving VIP Treatment at Department Stores... "Lowering the Burden Attracts Customers"

Average Spending per Customer ↓, Department Stores Facing Recession
Expanding Customer Attraction with More Affordable Popular Restaurants

As consumption of luxury and high-priced goods decreases due to the economic downturn, department stores are defending their sales by promoting 'popular eateries.' This strategy aims to attract visitors with more affordable and accessible products, encouraging additional shopping afterward.

On the 4th, the premium dining hall 'Gastro Table' was renewed and reopened at Hyundai Department Store Apgujeong Main Branch Food Hall, attracting a crowd of visitors.
[Photo by Hyundai Department Store].

According to the distribution industry on the 11th, the three major department stores?Lotte, Shinsegae, and Hyundai Department Store?are all expanding their food and beverage (F&B) selections in the second half of this year. Lotte Department Store plans to open the 'London Bagel Museum,' famous for its long lines and bagels, on the first floor of Lotte World Mall in Jamsil by the end of this month, occupying about 330㎡ (approximately 100 pyeong). Expectations for customer attraction effects through this are high. Earlier in March, 'Knotted World,' which opened flagship stores on the 5th and 6th floors of Lotte World Mall, has continued to draw over 3,000 customers daily. As customers visiting and waiting at Knotted World also visited nearby stores, total sales on the 5th and 6th floors in April, right after the opening, rose about 1.5 times compared to the previous year. The 5th and 6th floors house not only F&B stores but also fashion stores.

Last August, Lotte Department Store significantly strengthened its F&B offerings by adding 12 popular eateries from social media (SNS) to the deli corner on the basement first floor of its main store, effectively attracting the MZ generation (Millennials + Generation Z). From September last year to last month, sales from customers in their 20s and 30s at the main store's F&B outlets increased by about 70%. Based on the growth of customers in their 20s and 30s, Lotte Department Store's F&B sales in the first half of this year rose 25% compared to the same period last year.

'London Bagel Museum' preparing to open inside Jamsil Lotte World Mall
Photo by Kim Yuri.

Shinsegae Department Store recently began renovating the food hall at its Gangnam branch for the first time in 15 years since 2009. The plan is to create the largest food hall in Korea, approximately 19,835㎡ (about 6,000 pyeong), by adding spaces vacated by Central City's 'Pami Street' and the duty-free shop to the existing Gangnam food hall. In the former duty-free shop area, they plan to establish one of the largest wine specialty halls in Korea and premium restaurants, and are considering creating an exclusive membership program.

Hyundai Department Store renovated the food hall at its Apgujeong main store for the first time in 18 years, transforming it into a premium dining hall called 'Gastro Table,' filled with famous chef restaurants and dessert brands. Additional renovations will continue until November, introducing an espresso bar and dessert brands, as well as a space selling living products that complement food.

According to the Ministry of Trade, Industry and Energy, the monthly customer purchase price at department stores from January to May this year decreased by 0 to 5.1% compared to the same months last year. This decline in sales of high-priced products such as luxury goods is due to consumers tightening their wallets amid the economic recession. However, sales of relatively affordable and accessible F&B products increased.

According to the 'Department Store Trend Report 2023' released by the consumer data platform Open Survey, the most common experience at department stores besides shopping was dining out (87.1%). Among those who visited for dining purposes, 6.1 out of 10 also made additional purchases. A department store industry official said, "Recently, Hyundai Department Store attracting the Disney Store and department stores competing to bring in designer brand accessories and small items with relatively low prices are similar in context," adding, "They are encouraging visits with low-burden products."

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