South Korea retail sales rise

1 min readUpdated Nov 18, 2015Nov 18, 20152:00 AM

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Preliminary data from leading department and discount stores in October reveals South Korean retail sales are recovering post-Mers.

Combined sales last month at department stores run by Hyundai Department Store, Lotte Shopping and Shinsegae Co jumped 17.4 per cent year on year.

That’s a huge improvement on the 2.8 per cent department stores achieved in September and the seven per cent rise in discount department stores.

The preliminary data from the Finance Ministry shows clearly a bounce back following the Middle East Respiratory Syndrome (Mers) scare which caused tourists to travel elsewhere and locals to stay at home in fear of catching the viral epidemic.

Figures released by Statistics Korea last week show South Korea retail sales rose to their highest level in four months in September, up 4.1 per cent on September 2014.

Department store and discount store sales started to slide in June when the Mers crisis peaked.

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What this means

The October sales jump reflects a robust recovery, likely buoyed by deferred spending and returning consumer confidence following the Mers scare. This strong performance, especially among major department stores, will put pressure on specialty retailers and international brands to show similar growth in their upcoming reports. While luxury retailers like Tiffany & Co. Are expanding with new concepts in Asia, this broad-based recovery indicates underlying market strength rather than niche success. However, the reliance on a post-crisis rebound carries inherent risk; sustained growth hinges on ongoing consumer sentiment and tourist return, particularly from China and Japan. We should watch the Q4 full financial reports to see if this momentum translates into sustained profitability.

Sarah Chen

Questions & Answers

Which types of retail outlets saw sales increase last month, according to the preliminary data?

Combined sales at department stores run by Hyundai, Lotte, and Shinsegae jumped significantly in October. Discount department stores also saw a seven per cent rise.

How do October's department store sales compare to the previous month?

October's 17.4 per cent jump in department store sales is a significant improvement on the 2.8 per cent rise they achieved in September.

What caused the previous decline in retail sales?

Retail sales started to slide in June when the Middle East Respiratory Syndrome (Mers) crisis peaked, causing tourists to avoid South Korea and locals to stay home.

Reader pulse

Is this recovery sustainable?

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