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State-led sales campaign set to end, department stores report revenue increase

Retail/Tourism 15:41 July 12, 2020

SEOUL, July 12 (Yonhap) -- A state-led sales festival designed to boost spending amid the coronavirus outbreak was set to end Sunday, with major department stores posting an increase in revenue on high demand for luxury goods.

But discount store chains and traditional markets did not see intended sales-boosting impacts due mainly to a compulsory closure of outlets and lack of promotion strategy, respectively.

South Korea kicked off the 17-day sales festival, called the "Korea Donghaeng Sale" campaign, on June 26 in an effort to boost faltering domestic demand amid the new coronavirus outbreak. "Donghaeng" means going along together in Korean.

The file photo taken June 26, 2020, shows citizens lined up to buy duty-free products that hit local shelves at Lotte Department Store in Seoul's western ward of Yeongdeungpo. (Yonhap)

Major department stores, the sector hit hard by the virus outbreak, posted an increase in sales as people bought luxury items as part of "revenge spending" amid the COVID-19 pandemic, according to industry watchers.

Industry leader Lotte Department Store saw sales rise 4 percent between June 26 and July 9 from a year earlier, according to company officials.

No. 2 player Shinsegae Department Store and smaller rival Hyundai Department Store posted an 11.3 percent on-year rise and a 6.3 percent gain in sales, respectively, in the cited period.

But discount store chains posted a similar level of sales or a marginal decline despite big discount events targeting the sales festival.

The operators of discount store chains should close their outlets on the second and fourth Sunday every month under regulations designed to help smaller neighborhood shops. They had to shut down outlets Sunday, the last day of the sales fest, following the closure on June 28.

Traditional markets posted a letup in sales declines last week, but merchants said they did not directly feel the impact of the sales festival.

The file photo taken June 25, 2020, shows citizens shopping for groceries at a discount store chain in Seoul one day before the government's sales festival designed to boost domestic demand kicked off. (Yonhap)

sooyeon@yna.co.kr
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