"Only What's Necessary"... Cautious Spending Dulls Retail Sentiment for Q4

As consumers increasingly tighten their spending habits and open their wallets only for essential items, retail sentiment is projected to slow down in the fourth quarter of this year.

The Korea Chamber of Commerce and Industry (KCCI) announced today (October 21) that it compiled the Retail Business Survey Index (RBSI) for the fourth quarter of 2026, surveying 500 retail companies. The index came in at 88, dropping 4 points from the previous quarter's 92.

The RBSI quantifies the perceived business sentiment of retail companies nationwide. A reading of 100 or higher means more companies view the economic outlook positively than negatively, while a reading below 100 indicates the opposite.

Key factors cited for the worsening business outlook include cautious household spending, the spread of selective and thrift-oriented consumption patterns, and the onset of the seasonal off-season.

Among companies forecasting a worsening business environment in the fourth quarter, 70% pointed to "cautious household spending" as the primary reason.

Regarding customer consumption patterns, 78.4% responded that their "preference for cost-effective products was similar to or increased compared to previous years," while 83.6% answered that "the proportion of small-volume, purpose-driven purchases—picking up only what is needed—was similar to or increased."

Department store sentiment, which has been reaping the full benefits of a surge in foreign tourists, stood at 130 for the fourth quarter. Although down 9 points from the previous quarter, it remained the highest among all retail sectors.

According to the Korea Tourism Organization’s Data Lab, foreign tourists increased by 21.6% from January to September this year compared to the same period last year, and foreign credit card spending by tourists rose by 46.8%.

The fourth-quarter business sentiment index for large discount stores fell 1 point from the previous quarter to 111, while supermarkets dropped 12 points to 73.

Convenience stores saw a sharp plunge of 48 points to 79.

This steep drop is analyzed to be driven by the onset of the seasonal off-season, as chilly weather reduces outdoor activities and dampens consumption of beverages and ice cream.

Among the five retail sectors, only online shopping showed a rebound, with its sentiment index rising 8 points to 82.

Lee Seung-ryun, head of the Retail and Logistics Policy Team at the KCCI, stated, "Amid expectations for a year-end peak season, the spread of practical consumption and seasonal factors are overlapping, making the temperature differences across retail sectors pronounced." He added, "With cautious household spending and intensifying competition among retail channels persisting, the scope of a short-term rebound in perceived business sentiment is expected to be limited."

(File Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.