"They Hold a Lot of Samsung and Hynix"... A 'Record Boom' Brings Both Smiles and Tears

[Anchor]

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

Reporter Sim Useop has the story.

[Reporter]

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

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

The K-beauty craze and the weak 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 in April, sales 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 like 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 items and quantities they purchase due to the burden of inflation.

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

[Cho Sang-hoon / Research Fellow at Shinhan Securities: In fact, department stores have a very strong nature of purposeful shopping, 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 grows due to high inflation, and if instability in oil prices and exchange rates continues, consumer sentiment in the second half of this year could shrink even more rapidly.

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