Small Business Owners in Q3: "Better Than Last Year but Worse Than Q2"

Sports and Leisure Industry Sales Continue to Rise
Health and Medical Services Sales Decline
Korea Credit Data Publishes Small Business Trend Report

The COVID-19 pandemic has been escaped. However, it cannot be said to be good. This is the status of small business owners in the Republic of Korea in the third quarter. On the 5th, Korea Credit Data (KCD) announced the "Korea Credit Data Small Business Owner Trend Report (3rd Quarter 2023)," which contains the business status of small business owners nationwide in the past third quarter.

The sales trend of small business owners in the third quarter showed signs of escaping the impact of the COVID-19 pandemic. During this period, the average sales per small business establishment was 47.8 million KRW, an increase of 0.9% compared to 47.4 million KRW in the same period last year. As the COVID-19 situation eased, the increase in floating population appears to have improved the sales of small business owners. However, compared to the second quarter, the sales recovery trend seemed to have slowed. Compared to the previous quarter, both sales (-1.1%) and operating profit (-13.1%) decreased.

The keyword for the sales growth of small business owners was "outdoor activities." According to the Korean Standard Industrial Classification, industries classified under education services, accommodation and food services, and arts, sports, and leisure showed continuous sales growth. In the arts, sports, and leisure category, which includes sports centers, sporting goods stores, and performance venues, steady sales growth of 3.2% year-on-year and 5.9% quarter-on-quarter was recorded. The education service industry also saw sales increase by 5.0% year-on-year and 1.4% quarter-on-quarter. However, retail and wholesale industries experienced a decline in sales, decreasing by 1.6% year-on-year and 3.2% quarter-on-quarter.

The impact of increased outdoor activities was also observed in the sales changes of detailed industries. Among detailed industries, the fast food industry, including chicken restaurants and pizza places, recorded remarkable sales growth. Sales increased by 9.6% year-on-year and 5.1% quarter-on-quarter. Accommodation and travel services also saw sales increase by 8.9% year-on-year and 5.3% quarter-on-quarter. However, the health and medical services industry, including pharmacies and private clinics, experienced a decline in sales. Kim Hyung-gi, head of the Data Insight Team at Korea Credit Data, said, "It appears that related sales increased as outdoor activities increased after the endemic situation."

The Korea Credit Data Small Business Owner Trend Report was prepared by extracting and processing data from 160,000 business establishments out of 1.3 million nationwide that use the management service "Cash Note" operated by KCD. The selected business establishments for data extraction were chosen by applying the criteria of the Small Business Owner Survey by the Ministry of SMEs and Startups. Some industries, such as manufacturing, which do not fit the target users of the Cash Note service, were excluded. The Korea Credit Data Small Business Owner Trend Report is scheduled to be announced immediately after each quarter in the future. If requested by local governments or government agencies and associations related to small business owners, detailed analysis materials including rent, public opinion trends, and survey results will also be provided.

Kang Ye-won, Data Strategy Director at Korea Credit Data, said, "The Korea Credit Data Small Business Owner Trend Report is based on actual management data of small business owners, so it can quickly and accurately show the current status of small business owners," adding, "Since small business owners are the roots of our economy and the foundation of the livelihood economy, we thought it was important to accurately understand their status and decided to publish the report regularly."