Small business sales rise with livelihood recovery coupons
The most popular item people bought with consumption coupons was eyeglasses ? both during Covid-19 as well as with the latest livelihood recovery coupons ? but this time, people ate out more.
Sales at small businesses across Korea rose slightly following the government’s recent distribution of Livelihood Recovery Consumption Coupons, with notable increases seen in both retail and dining sectors, according to new credit card data released Monday.
From July 21 to 27 ? the first week after the coupons were issued ? card spending at small businesses rose an average of 2.2 percent nationwide compared to the previous week, according to Korea Credit Data (KCD), which analyzed data from 382,207 business locations.
“Overall, the coupons had a positive impact on small business sales,” said Kang Ye-won, head of data at KCD. “Notably, sectors closely tied to daily living ? such as retail, dining and personal services ? saw clear growth.”
By business type, optical shops saw the highest increase in weekly sales, with a 56.8 percent jump. Analysts say consumers are likely taking advantage of the coupons for purchases that are considered essential, even if not urgently needed. Sales at fashion and clothing stores rose 28.4 percent. Noodle restaurants followed with a 25.5 percent increase, foreign language academies with 24.2 percent, pizza restaurants with 23.7 percent, sushi and roll restaurants with 22.4 percent, beauty salons with 21.2 percent and sports and leisure goods stores with 19.9 percent.
The fact that many consumers used the subsidies on semi-durable goods like glasses and clothing reflects past trends. According to a 2020 study on emergency disaster relief funds by the Korea Development Institute (KDI), the largest increases in sales were seen in semi-durable goods, with a gain of 10.8 percentage points, and essential goods, with an 8.0 percentage point increase.
During the first five weeks of that program, the sectors with the highest increases in sales were pharmacies, with 30.8 percent; furniture stores, with 19.9 percent; optical shops, with 18.1 percent; supermarkets, food cooperatives and grocery stores, with 12.3 percent; and automobile repair shops, with 12.1 percent.
In terms of spending proportion using the government-issued cards, optical shops accounted for 18.0 percent, laundromats for 16.1 percent, supermarkets and food co-ops for 11.9 percent, fashion and accessories for 10.9 percent and bakeries for 10.0 percent.
One notable difference this time was the performance of restaurants. In 2020, due to social distancing measures, there was little change in restaurant sales before and after the subsidy program. This time, however, eateries such as noodle and pizza shops were among the top gainers.
Despite the rise in retail, the service sector saw a slight downturn. Over the same week, retail sales rose by 12 percent, but service sector sales declined by 3 percent. A KCD official said the decline was likely due to the combination of extreme heat and the beginning of the summer holiday period.
By region, South Gyeongsang saw the highest week-on-week growth at 9.4 percent, followed by North Jeolla with 7.5 percent, Gangwon with 6.6 percent and South Chungcheong with 5.8 percent. In contrast, sales fell by 4.0 percent in Seoul and 0.8 percent in Jeju.