Passenger Cars and Pharmaceuticals Up,
Home Appliances and Cosmetics Down
With strong sales of passenger cars, retail sales this year have rebounded to an upward trend for the first time in four years.
According to the "Recent Status and Implications of Retail Sales" report released by the Korea Employers Federation (KEF) on December 15, the cumulative nominal retail sales index for the first to third quarters of this year increased by 1.9% compared to the same period last year. This marks a recovery in retail sales, which had been sluggish for the past three years since 2021 (8.2%).
By quarter, retail sales in the third quarter (3.2%) saw a significant increase compared to the first quarter (1.4%) and the second quarter (1.1%).
The real retail sales index recorded a cumulative growth rate of 0.4% for the first three quarters of this year. This is an improvement compared to the negative growth rates seen in 2023 (-1.4%) and 2024 (-2.0%), when sales were sluggish. However, the level remains lower than before the COVID-19 pandemic.
By product category, "passenger cars" posted the highest growth among 15 categories in both the nominal index (12.9%) and the real index (14.0%). In particular, the third quarter saw a sharp increase, with 16.0% (nominal) and 16.3% (real). Pharmaceuticals and other durable goods also increased, while home appliances, other semi-durable goods, and cosmetics declined.
Excluding passenger cars, the cumulative nominal retail sales index for the first three quarters increased by 0.8%, while the real index decreased by 1.1%.
By business type, retail stores specializing in passenger cars and fuel recorded the highest growth among eight business types, with a nominal index of 6.9% and a real index of 6.7%. Duty-free shops saw a significant decline, and large discount stores as well as supermarkets and general merchandise stores also performed poorly.
Lee Seungyong, head of the Economic Analysis Team at KEF, stated, "It is encouraging that retail sales, which had been weak recently, have turned to a recovery trend this year." He added, "In order for domestic demand to recover more rapidly, not only consumption but also investment must increase. Therefore, regulatory reforms and legislative support for companies to promote corporate investment should be actively supplemented."
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