What: Department stores are struggling in Korea.

Why it is important: The competition from online players is rising and makes the most of customers’ disaffection for non-essential goods.

In August, South Korea's retail sales increased by 3.3% year over year, driven by convenience stores, super super market (SSM) operators, and online cosmetics and food retailers. The Ministry of Trade, Industry, and Energy (MOTIE) found a 7.6% rise in convenience store sales due to their closeness, small purchase shopping, and more outdoor activities during the summer holidays. SSMs saw a 3.2% growth, mainly from fresh/prepared and processed foods, despite a dip in daily necessities. Online sales surged by 8.1%, with cosmetics and food sales growing by 14.1% and 13.0%, respectively. In contrast, brick and mortar hypermarkets experienced an 8.4% decline, with significant drops in home/living and food sales. Department store sales also fell by 4.9%, and there was a notable reduction in sales for fashion/clothing (2%) and sports (5.6%), reflecting a shift in consumer preferences away from non-essentials due to diminished consumer sentiment.

South Korean sales grew in August thanks to convenience stores and online