The First Peak Season in the COVID Era... Retail Industry Stakes Everything on Chuseok

Worst Performing Department Stores and Large Mart in First Half
Strengthening Chuseok Gift Sets Instead of Attracting Customers
Reduced Hometown Visits, Increased Gift-Giving Atmosphere
Significant Increase in Pre-Orders Compared to Last Year
Higher Preference for High-End Gifts
Unique Gift Sets Like Hygiene Products Also Emerging

[Asia Economy Reporter Seungjin Lee] The distribution industry is putting everything on the line for the first Chuseok peak season since the outbreak of the novel coronavirus disease (COVID-19). Due to the impact of COVID-19, department stores and large supermarkets, whose sales plummeted in the first half of this year, have recently strengthened their Chuseok gift sets instead of attracting crowds as the number of confirmed COVID-19 cases surged. Just in time, the limit on agricultural, livestock, and fishery products and processed goods under the Improper Solicitation and Graft Act (Kim Young-ran Act) has been raised. Although the pre-order period is ending, they plan to put all their efforts into this year's last peak season by introducing new products and diversifying price ranges.

Generous Gifts

According to the distribution industry on the 11th, as the atmosphere of refraining from visiting hometowns formed due to COVID-19, the pre-order sales performance of Chuseok gift sets at various department stores and large supermarkets significantly improved compared to last year. In particular, the compensatory psychology for not being able to visit parents or grateful people in person and the savings on travel expenses led to a sharp increase in the purchase of high-priced premium gifts despite the economic downturn. Livestock products, including Korean beef, accounted for the largest share, and dried yellow corvina sets and health functional foods enjoyed high popularity.

Shinsegae Department Store reported that sales of Chuseok gift sets from the 24th of last month to the 9th increased by 44.6% compared to last year. By category, livestock products grew by 84%, seafood by 49%, and alcoholic beverages surged by 141.6%. Among these, the most popular gifts were the 950,000 KRW 'Luxury Traditional Dried Yellow Corvina Manbok' gift set and the approximately 1,100,000 KRW 'Luxury Korean Beef Special' set. In the alcoholic beverages category, sales rose significantly thanks to customers seeking wine as the number of 'home drinking' consumers increased.

Lotte Department Store's pre-order sales of Chuseok gift sets this year increased by 37.5% compared to the same period last year. By category, meat gift sets centered on Korean beef rose by 149%, fresh fruits by 141%, and dried yellow corvina by 105%, all more than doubling last year's sales performance. Hyundai Department Store reported that from the 14th of last month to the 9th, sales of Chuseok gift sets increased by 88.6% compared to the same period last year. Especially, Korean beef gift sets priced over 400,000 KRW recorded a sales growth rate of 131.3%, and dried yellow corvina gift sets priced over 300,000 KRW grew by 96.1%.

At large supermarkets, the number of consumers seeking health functional foods has increased sharply due to COVID-19. Lotte Mart's pre-order sales of Chuseok gift sets rose by 17.5% compared to last year, with health functional foods increasing by 112.5% and alcoholic beverages by 122.5%. A Lotte Mart official explained, "This year, the number of customers looking for health functional food gifts for their parents' health has greatly increased," adding, "Regarding alcoholic beverages, more customers purchased wine in large quantities than last year."

Direct Hit from COVID-19, Fighting for the Chuseok Peak Season

This Chuseok, the distribution industry is also introducing unique gift sets that were not available last year. Hygiene sets consisting of masks, hand sanitizers, and hand cleansers have taken up a corner in large supermarkets. Aekyung Industrial launched a set including hand sanitizer, hand cleanser, and masks, and LG Household & Health Care also released a set containing hand cleanser and masks. An LG Household & Health Care official said, "This is the first time we have planned gift sets with hygiene products," explaining, "We diversified product compositions so consumers can choose according to their needs." Convenience store CU attracted attention by assembling gift sets with non-contact thermometers and portable sterilizers.

Products for customers spending Chuseok alone at home instead of visiting their hometowns due to COVID-19, as well as premium gift sets and gift sets priced under 100,000 KRW, have diversified in price range. Shinsegae Department Store offers various gift sets for 'Homechujok' who enjoy Chuseok alone. Representative products include the DeLonghi fully automatic coffee machine sold for 840,000 KRW. They also sell the Fortnum & Mason picnic hamper containing the signature biscuit along with the black tea 'Royal Blend.' These products reflect the home cafe and home drinking trends.

The Hyundai.com online store increased the quantity of online-exclusive gift sets by about 30%, offering a total of around 1,000 items. Representative products include the Hyundai Special Korean Beef Practical Set (160,000 KRW) and Jayeom Yeonggwang Dried Yellow Corvina (130,000 KRW). Hyundai Department Store also prepared various practical sets priced under 100,000 KRW, such as the Australian designated ranch Wagyu Nan set (100,000 KRW) and apple, pear, and melon sets (95,000 KRW).

Galleria Department Store will start the main sales of the '2020 Chuseok Gift Sets' at all food halls from the 14th to the 29th. In line with the recent spread of contactless consumption culture, they will newly introduce a KakaoTalk Gift Link service. Along with popular gift sets such as Shine Muscat and Apple Mango sets and Black Hair Korean Beef meat sets, they will also offer unique gift sets like the Bujua Champagne 3 types copper package with a copper exterior and 'Planterior,' which decorates the home interior with plants.