Lim Hyung-joon and Choi Mira
The retail business in Korea remains subdued for the fourth year, with recovery in outlook restricted to ecommerce.
According to the Korea Chamber of Commerce and Industry (KCCI) on Thursday, the retail business survey index (RBSI) based on a poll of 1,000 retailers across the nation stood at 93 for the July to September period, up 2 points from the previous quarter. This is the first time for the figure to pick up since the second quarter last year.
The figure, however, has stayed below the benchmark 100 since the second quarter 2015. A reading above 100 means there are more optimists than pessimists about the business outlook, and vice versa for reading below 100.
Only online and home shopping operators had positive outlook with the index reaching 103, contrary to brick-and-mortar stores with gloomier sentiment. The reading for big-box store came to 94 and convenience store 87, up 2 points and 10 points on quarter, respectively, on expectations of upcoming vacation season and Chuseok holidays. The index for department store went down 3 points due to poor sales of fashion accessories and food.
More than half of the retailers, 54.6 percent of the total respondents, predicted that their profitability in the third quarter would remain unchanged, followed by 29.7 percent who said their business would get worse and 15.7 percent who expected a pickup. It reflected a little improvement in their business confidence compared to the previous survey in which most of 38.9 percent had said they would be worse off.
As for necessary government measures to boost the retail industry, 57.2 percent wanted the government to ease regulations such as limitations on new openings. It was followed by slowing down the pace of minimum wage hikes at 15.0 percent, generous support on part with the manufacturing industry at 10.9 percent and lowering credit card fees 5.4 percent.