"They Hold a Lot of Samsung and Hynix"... Department Stores Enjoy 'Record-Breaking Boom'

[Anchor]

With a recent surge in foreign tourists visiting Korea and a booming stock market, the domestic department store industry is reaping the benefits. However, looking at the retail sector as a whole, while sales at department stores—where high-end consumption is concentrated—are increasing, sales at large discount stores are actually declining, highlighting a clear polarization in consumption.

Reporter Sim Useop reports.

[Reporter]

A duty-free shop inside a department store last weekend.

Cosmetic and clothing stores are packed with tourists from China and other countries.

The K-beauty craze and the weak Korean won have played a significant role.

[Yang Jiaye, Wu Shuying / Chinese Tourists: Usually, when we come to Korea, we buy cosmetics or skincare products, and they are definitely cheaper than in China. Korea also has a good shopping environment and purchasing experience.]

Long lines of domestic customers have formed in front of luxury brand stores.

Stores selling watches and jewelry worth tens of millions of won are much busier than usual.

[Department Store Customer: I think there are more people shopping because stocks have gone up a lot. (People around me) have a lot of Samsung Electronics. And Hynix, too.]

The three major department store chains recorded their highest-ever revenue in the first quarter, and sales in April also increased by more than 20% compared to a year ago.

In particular, sales of imported high-end brands and luxury goods surged by over 38%.

This is due to a combination of factors, including the sharp increase in foreign tourists, the so-called "wealth effect" from rising asset prices such as stocks, and increased income in the semiconductor industry.

However, not everyone in the retail industry is smiling.

Large discount stores and supermarkets, which are mainly used by ordinary households, are struggling to escape a slump.

While the expansion of online shopping has had a major impact, analysts suggest that consumers are increasingly reducing the number and quantity of items they purchase due to the burden of inflation.

Some point out that the domestic demand recovery driven by semiconductor-led economic growth and the stock market boom is an illusion created by a "concentration on premium consumption."

[Cho Sang-hoon / Research Fellow at Shinhan Securities: In fact, department stores have a strong nature of purposeful purchasing, and it appears that the "trickle-down effect," where this "wealth effect" leads to overall consumption, has not yet reached large discount stores.]

There are also concerns that if the burden of household spending on daily necessities increases due to high inflation, and if instability in oil prices and exchange rates continues, consumer sentiment could shrink even faster in the second half of this year.

Reported by Sim Useop | Video by Kim Jong-tae | VJ by Jeong Han-wook | Graphics by Seo Seung-hyun | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.