SEOUL, July 12 (Korea Bizwire) — A state-led sales festival designed to boost spending amid the coronavirus outbreak was set to end Sunday, with major department stores posting an increase in revenue on high demand for luxury goods.
But discount store chains and traditional markets did not see intended sales-boosting impacts due mainly to a compulsory closure of outlets and lack of promotion strategy, respectively.
South Korea kicked off the 17-day sales festival, called the “Korea Donghaeng Sale” campaign, on June 26 in an effort to boost faltering domestic demand amid the new coronavirus outbreak. “Donghaeng” means going along together in Korean.
Major department stores, the sector hit hard by the virus outbreak, posted an increase in sales as people bought luxury items as part of “revenge spending” amid the COVID-19 pandemic, according to industry watchers.
Industry leader Lotte Department Store saw sales rise 4 percent between June 26 and July 9 from a year earlier, according to company officials.
No. 2 player Shinsegae Department Store and smaller rival Hyundai Department Store posted an 11.3 percent on-year rise and a 6.3 percent gain in sales, respectively, in the cited period.
But discount store chains posted a similar level of sales or a marginal decline despite big discount events targeting the sales festival.
The operators of discount store chains should close their outlets on the second and fourth Sunday every month under regulations designed to help smaller neighborhood shops.
They had to shut down outlets Sunday, the last day of the sales fest, following the closure on June 28.
Traditional markets posted a letup in sales declines last week, but merchants said they did not directly feel the impact of the sales festival.