Large Discount Retailers Hit Hard by Chuseok Timing and Exclusion from Consumer Coupon Program
Early November’s Largest Discount Events Drive Sales Upturn
Rising Expectations for Improved Profitability in the Fourth Quarter
Large discount retailers, which posted sluggish business results in the third quarter of this year, have focused their efforts on the 'K-Black Friday' event, the largest discount promotion of the year, seizing an opportunity for a performance rebound. Although their business activities faced restrictions, such as being excluded from the government’s consumer coupon program aimed at revitalizing the economy, they expect a recovery in the fourth quarter due to the Chuseok holiday, large-scale discount events, and the offsetting effect of one-off costs.
On the 30th of last month, when SSG Day began, customers were lining up to check out at the Emart Yongsan store. Photo by Emart
According to the industry on November 18, Emart participated in Shinsegae Group’s Black Friday event, 'SSG Day,' held from October 30 to November 2. During this period, related sales increased by about 6% compared to the same period last year. On the weekend of November 1 and 2, sales exceeded 100 billion won for two consecutive days, and even on the first day, a Thursday, sales more than doubled compared to usual. Emart analyzed that extending SSG Day from three days last year to four days this year had a clear effect on increasing both visitor numbers and sales. Specifically, half-priced pork belly and pork neck, introduced at the start of the event, saw sales surge by 400% compared to last year, with all 200 tons prepared-over ten times the usual quantity-completely sold out.
Lotte Mart also held its own Black Friday equivalent event, 'Thank You Festival,' from October 30 to November 12, divided into two weeks. During this period, sales rose by about 5% compared to the same event last year. In the first week (October 30 to November 5), sales of Korean beef, which was offered at half price, increased by about 10% year-on-year, and sales of frozen meal kits and frozen noodles, which were sold at half price for the first four days of the event, also grew by about 50%. In the second week, sales of Australian beef offered at half price more than doubled year-on-year, driving the performance rebound, and sales of salmon, sold at a 50% discount, more than tripled compared to the same days last year.
On the 30th of last month, the start of the Thanksgiving sale, customers were browsing discounted products at Lotte Mart Zeta Plex Seoul Station branch in Jung-gu, Seoul. Provided by Lotte Mart
During the same period, Homeplus held a large-scale discount event, 'BLACK Homeplun,' across all channels, including hypermarkets, online, express stores, and malls. In the early stage of the event (October 30 to November 2), total mall sales jumped 33% year-on-year. During this period, popular items such as pork belly and pork neck at 890 won per 100g, and traditional whole chicken at 3,990 won, sold out completely, while total livestock sales increased by 45% compared to the previous month.
Previously, these major retailers saw their third-quarter results decline year-on-year. For example, Emart’s total discount store sales reached 2.9707 trillion won, down 3.4% from the same period last year, and operating profit dropped 20.9% to 54.8 billion won. During the same period, Lotte Shopping’s domestic grocery division, which includes Lotte Mart and Lotte Super, posted sales of 1.3035 trillion won, an 8.8% decrease year-on-year, and operating profit fell 85.1% to 7.1 billion won. This was largely due to the timing difference of the Chuseok holiday, which is a major sales period: last year, it fell in the third quarter (September), but this year, it was pushed back to October. Another reason was that large discount retailers were excluded from the consumer coupon program, so they could not capture this demand.
This year, there is an outlook that the fourth-quarter results will improve, thanks to the focus on discount events like 'Black Friday.' An industry official said, "At the end of last year, consumer sentiment froze due to the 12·3 Martial Law Incident and the Jeju Air passenger plane accident at Muan Airport, and one-off costs such as retirement benefit reserves and voluntary retirement compensation increased following the Supreme Court’s ruling on ordinary wages, resulting in poor fourth-quarter performance. This year, however, we expect the situation to improve."
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