Seoul: South Korean offline retailers experienced a decline in sales during the first half of the year, marking the first on-year drop in five years. This decrease is primarily attributed to weak consumer sentiment and a persistent shift towards online shopping, as revealed by recent government data.
According to Yonhap News Agency, revenues of major offline retailers saw a slight decrease of 0.1 percent on-year during the January to June period. This marks the first on-year decline for the first-half period since the onset of the COVID-19 pandemic in 2020. Notably, sales fell in most months, except for January and May, which witnessed sales boosts due to Lunar New Year demand and other factors.
The decline has been linked to sluggish consumer spending, an increasing preference for online shopping, and a continued reduction in the number of physical stores and customer visits. Large discount stores and convenience stores experienced negative growth of 1.1 percent and 0.5 percent, respectively. Meanwhile, department stores managed a modest gain of 0.5 percent, driven by rising consumption of luxury goods.
In contrast, sizable supermarkets reported a 1.8 percent increase in sales. This growth was supported by store expansion, increased demand for home-cooked meals, and rising food prices. Online retailers, on the other hand, continued their robust growth trajectory, with e-commerce platforms achieving a 15.8 percent on-year increase in sales during the first half.
Overall, the combined sales of offline and online retailers rose by 7.8 percent on-year during this period, indicating the ongoing shift in consumer purchasing patterns.