[THE INVESTOR] South Korea‘s large retailers posted solid sales ahead and during this year’s Chuseok holiday helped by all out marketing efforts to attract customers, industry sources said on Oct. 4.
Data provided by local retailers showed double digit growth by some companies as the country celebrated the longest holiday in decades.
Chuseok, or the Korean autumn harvest celebration, that fell on Oct. 5 this year is one of the most important holidays in the country, along with Lunar New Year. During the holiday people visit their hometowns to pay respects to their ancestors and meet family and friends. At such gatherings there is usually an exchange of gifts that fuels sales.
This year‘s festivities were particularly long because there were two national holidays and two weekends preceding and following Chuseok.
Lotte Department Store said sales from Sept. 11 through Oct. 2 moved up 3.7 percent on-year, with demand for both budget and high-end gifts going up compared to the year before.
The leading retailer reported that gift sets exceeding 1 million won ($870) sold out very quickly. It added that overall demand for various package sets comprised of fruits and processed food advanced 9.5 percent compared to the previous year.
Corporate insiders said sales of its stores from Sept. 30 though Saturday surged 23.3 percent on-year, as many people came shopping to take advantage of various discounts and promotional events.
“This year’s Chuseok fortuitously coincided with the Korea Sale Festa period that helped sales,” a company official said.
Shinsegae Department Store said pre-orders for Chuseok gifts rose 12.6 percent on-year with Hyundai Department Store reporting marginal gains in gift sets from Aug. 25 to Oct. 3, a day before Chuseok.
Hyundai, the smallest of the country‘s department stores, however, said there was a sharp rise in demand for health-related supplements and vitamins.
It said from Sept. 30 through Oct. 7, sales at its stores rose a solid 7 percent on-year.
In regards to the country’s large hypermarkets, industry leader E-Mart reported 3.2 percent dip in sales for gift sets, while Homeplus and Lotte Mart both reported 2.5 percent and 2.2 percent gains.
The discount chains said 70-80 percent of sales were those under 50,000 won.
“The weak sales seem to be affected by the Kim Young-ran antigraft law that prevented people from buying expensive gifts,” a E-Mart official said.
The law outlaws giving and receiving gifts by those in occupations that call for higher ethical standards.
In contrast to large department stores and discount outlets, retail data for traditional markets did not experience any boom in sales this year.
Exact sale figures still need to be collected but many merchants at traditional markets claimed 30 percent drop in sales compared to the past.
“There has been a noticeable decline in sales over the past several years despite support by the government,” a vegetable store owner at a Seoul market said.
He said that there is a pressing need for store owners to come together and find a solution to the problem before things get worse.
By Park Ga-young and newswires (email@example.com)