SEJONG, Nov. 2 (Korea Bizwire) – South Korea’s retail sales rose to a 4-month high in September as tax cuts and the Chuseok holiday propped up consumer spending, a government report showed Monday.
Retail sales topped 31.13 trillion won (US$27.28 billion) in September, up 4.1 percent from 29.9 trillion won a year earlier and the highest amount since May, according to the report by Statistics Korea. The number also represents a 5.7 percent increase from 29.45 trillion won reached in August.
The on-year gain is the highest reached since the 6 percent increase reported for January 2014.
“Domestic demand was fueled by excise tax cuts that went into effect on Aug. 26 and the Chuseok holiday which fell towards the end of the month,” an official at the statistical agency said. “A rise in one-person households boosted sales at convenience stores.”
Chuseok, or Korean Thanksgiving that fell on Sept. 27 this year, almost always pushes up spending as people buy gifts for friends and family and prepare special food. The holiday is celebrated according to the lunar calendar and changes from year to year. In 2014, it fell in the early part of September.
Reflecting this, sales of food and beverages surged 14.5 percent on-year, with numbers for cosmetics, furniture and clothes all rising. On the other hand, demand for consumer electronics and communications that rose sharply in August, dipped 2.1 percent in September.’
Department stores and large discount outlets posted solid gains of 5.7 percent and 10.4 percent, respectively, with supermarkets and convenience stores all posting strong sales gains last month compared to the year before. Supermarket sales advanced 7.3 percent, with gains for convenience stores hitting 32.8 percent.
Convenience store sales were buoyed by a hike in cigarette prices that were marked up on Jan. 1.
Online shopping sales, which have been growing swiftly in recent years, shot up 18.3 percent on-year to 4.32 trillion won in September on brisk demand for miscellaneous goods and agrofisheries products.
Online shopping accounted for 13.9 percent of all retail sales in the one-month period.
Purchases made through smartphones, tablets and other mobile devices, meanwhile, soared 56.6 percent on-year to 2.04 trillion won, accounting for 47.2 percent of all online sales in September, according to the report.