Chuseok sales weren’t as terrible as expected
In this article (5)
 |
|
Going into last week’s Chuseok holidays, expectations were low in the retail sector due to a prolonged economic slowdown and a soon-to-be-implemented anti-graft law that will make expensive presents unlawful.
Against all odds, however, four major department stores in Korea enjoyed growth in the sales of holiday gift sets. To skirt an anti-graft law known as the Kim Young-ran Act, which goes into effect Sept. 28 and bans the exchange of gifts costing more than 50,000 won among civil servants and even journalists, the stores offered lower-cost gift sets.
Galleria Department Store said sales of holiday gift sets rose 10 percent between Aug. 26 and Sept. 14 compared to the same period last year.
The proportion of products that were cheaper than 50,000 won was 26 percent – the highest share and 6 percentage points more than last year. Products that cost more than 300,000 won accounted for 14 percent, 1 percentage point lower than last year.
Galleria Department Store expanded gift options that cost less than 50,000 won from last year’s 56 items to 478. As a result, revenue generated from 50,000-won-or-less products rose by 47 percent year-on-year.
Lotte Department Store said sales of holiday gift sets between Aug. 26 and Sept. 13 rose 8.6 percent year-on-year. Sales of processed food products and daily necessities – which usually cost less than 50,000 won – rose by 16.5 percent. But sales of meat and gulbi (dried corvinas) – relatively expensive holiday gifts – only increased by 6.5 and 3.8 percent respectively.
Hyundai Department Store said its holiday gift set sales between Aug. 29 and Sept. 14 rose by 3.8 percent.
“Galleria Department Store expanded gift options that cost less than 50,000 won from last year’s 56 items to 478.”
Shinsegae Department Store saw a sales increase of 3.6 percent in Chuseok gift sets sold between Aug. 26 and Sept. 13. Products or sets cheaper than 50,000 won saw an increase of 7.8 percent while more costly items only rose 2.9 percent.
The Kim Young-ran Act was not the only factor in holiday spending.
An unprecedented heat wave during the summer on top of a prolonged economic slowdown prompted many consumers to buy health supplements, which are cheaper than agricultural and marine products.
The most popular product was red ginseng extracts or pills. Health-related products saw a sales surge of 26 percent year-on-year at branches of Galleria Department Store. The top seller in the health category was red ginseng extract, which is in the 80,000-won price range.
Shinsegae, which is known for its extensive and affordable wine selection, said sales of wine rose the most – 40.5 percent – followed by health-related items, which rose by 20.8 percent year-on-year.
Health-conscious products were the most popular at Lotte as well, enjoying a 28 percent year-on-year increase in sales.
Questions & Answers
Q.What is the primary reason why expectations for retail sales were so low before the Chuseok holidays?
What is the primary reason why expectations for retail sales were so low before the Chuseok holidays?
Expectations were low due to a prolonged economic slowdown and the upcoming implementation of an anti-graft law. This law would ban the exchange of expensive presents, affecting traditional holiday gift-giving.
Q.How did department stores manage to achieve growth in gift set sales despite the new anti-graft law?
How did department stores manage to achieve growth in gift set sales despite the new anti-graft law?
To navigate the Kim Young-ran Act, stores expanded their offerings of lower-cost gift sets, specifically those priced under 50,000 won. This strategy allowed them to cater to the new gifting regulations.
Q.Besides the anti-graft law, what other factor influenced consumer spending during the holiday period?
Besides the anti-graft law, what other factor influenced consumer spending during the holiday period?
An unprecedented summer heat wave, in addition to the economic slowdown, prompted many consumers to buy health supplements. These products were generally cheaper than traditional agricultural and marine gifts.
Q.Which specific product category experienced a significant sales increase across multiple department stores?
Which specific product category experienced a significant sales increase across multiple department stores?
Health-related products, such as red ginseng extracts and other health supplements, saw a notable sales surge. This trend was observed at Galleria, Shinsegae, and Lotte department stores.
Reader pulse
Will gift set spending remain low?
19,097 votes so far