KCCI Survey Shows Overall Offline Decline
There is a forecast that the retail market recovery will be difficult in the fourth quarter of this year.
The Korea Chamber of Commerce and Industry (KCCI) announced on the 6th the Retail Business Survey Index (RBSI) forecast based on a survey of 500 domestic retail distribution companies. The RBSI for the fourth quarter of this year was recorded at 80. This indicates that retail distribution companies view the fourth quarter business outlook more negatively compared to the previous quarter. KCCI explained that the burden of household debt due to interest rate hikes and rising consumer prices have dampened consumer sentiment. An RBSI above 100 means that more companies have a positive outlook for the next quarter, while below 100 means the opposite.
Among offline distribution sectors, expectations declined in most formats including convenience stores, large discount stores, and department stores. On the other hand, online shopping saw a slight increase.
Trend of the Korea Chamber of Commerce and Industry Retail Business Survey Index (RBSI) [Image source=Korea Chamber of Commerce and Industry]
Convenience stores showed the largest decline due to reduced foot traffic caused by cold weather and intensified competition. Large discount stores and department stores are also struggling despite discount events, due to the strength of online shopping and increased competition.
Online shopping's forecast rose positively influenced by expectations for clothing sales in the fourth quarter and the potential resolution of the settlement delay issue. However, the negative impact from the TimeF incident and the possibility of restructuring in the online distribution market continue to burden the market. The most frequently mentioned channels expected to attract TimeF users are major domestic platforms such as Naver and Coupang.
Kim Min-seok, head of the Distribution and Logistics Policy Team at KCCI, said, "Consumers still feel the high perceived inflation," adding, "It is necessary to stimulate the frozen consumer sentiment through large-scale discount events like the Korea Sale Festa."
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