Q3 Small Business Sales Rebound on Consumption Coupon Effects

Average Sales per Small Business: 45.6 Million Won
Modest Growth Year-on-Year and Quarter-on-Quarter
Profits Decline Compared to Previous Quarter

In the third quarter, small business owners saw their sales rise both quarter-on-quarter and year-on-year, indicating a gradual recovery. This trend is attributed to the overall economic rebound, further boosted by the effects of the livelihood recovery consumption coupons. However, profit levels declined slightly compared to the previous quarter due to a sharp increase in costs.

On December 1, Korea Credit Data (KCD) announced the release of its “Korea Credit Data Small Business Trend Report (Q3 2025),” which analyzes the third-quarter business data of small business owners nationwide.

In the third quarter, the average sales per small business location reached 45.6 million won, up 5.28% year-on-year and 1.16% quarter-on-quarter. Average expenditures rose to 34.35 million won, marking a 3.75% increase from the previous year and a 3.22% increase from the previous quarter. As a result, average profit was 11.79 million won, up 10.22% from the previous year but down 4.63% from the previous quarter. The profit margin stood at 24.7%, which is a 1.11 percentage point increase year-on-year but a 1.5 percentage point decrease compared to the previous quarter.

In the third quarter, profits per small business location declined compared to the previous quarter as expenditures continued to rise. Many self-employed business owners faced increasing burdens for essential business expenses such as material costs, operating expenses, rent, and labor costs, suggesting that they have reached a point where further cost reductions are no longer possible.

By sector, most industries showed a slight upward trend except for certain segments in the food service industry such as buffets (-11.8%), bakeries and desserts (-2.0%), and snack bars (-1.0%). In the service industry, most sectors saw sales increase both quarter-on-quarter and year-on-year, except for accommodation and travel services (-1.2%) and arts, sports, and leisure services. In the distribution sector, the comprehensive distribution industry stood out with an 8.8% quarter-on-quarter increase.

Looking at the financial status, the outstanding balance of domestic individual business loans in the third quarter of this year was 726.6 trillion won, with the banking sector accounting for 433.5 trillion won (59.7%) and the non-banking sector accounting for 293.1 trillion won. Among non-banking institutions, mutual finance had the highest loan share at 232.7 trillion won. The amount of overdue individual business loans was 13.5 trillion won, a 0.7% increase from the previous quarter. In particular, the delinquency ratio relative to outstanding loans was relatively high in savings banks (6.0%) and mutual finance (3.2%), while the banking sector maintained a low delinquency ratio at 0.6%. This is interpreted as the financial sector strengthening risk management focused on high-risk borrowers amid economic uncertainty.

This report also analyzed the effects of the first and second rounds of livelihood recovery consumption coupon distributions. During the four weeks following the start of the first round on July 21, nationwide sales of small businesses increased by 6.4% year-on-year, with the distribution sector showing the highest growth at 16.5%. By region, non-capital areas such as Busan (+10.9%) and Daegu (+10.5%) saw significant increases. The second round, which took place during the Chuseok holiday, also had a positive effect. During the four weeks before and after the holiday, nationwide average sales rose by 3.1% year-on-year, with sales increasing across distribution (+7.8%), service (+2.3%), and food service (+1.4%) sectors. Comparing this year's Chuseok holiday, which was affected by the second round of livelihood recovery coupons, to last year's holiday, average sales for small businesses nationwide increased by 3.1%, with sales rising across most sectors and regions.

Kang Yewon, Head of Data at Korea Credit Data, stated, "In the third quarter, the effect of the livelihood recovery consumption coupons led to a remarkable sales recovery, especially in the distribution sector. However, the rapidly rising operating costs caused actual profits for small business owners to decrease compared to the previous quarter." She added, "Whether consumer sentiment improves following this round of livelihood recovery coupons will be the key variable shaping the business outlook for small businesses in the fourth quarter."

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