Discount store sales likely to slow next year

By Nam Kwang-sik
SEOUL, Dec. 10 (Yonhap) -- Sales at discount stores in South Korea are expected
to slow down next year, while those at department stores are forecast to rise as
consumption patterns have become more polarized since the economic slump, market
watchers said Thursday.
The retail outlook for 2010 came at a forum hosted by the Korea Chamber of
Commerce and Industry.
"The growth of discount store sales may slow next year, as the economic slump has
deepened the polarization of consumption patterns," said Kim Sung-young, an
official at Shinsegae Co., the country's second-largest retailer.
Sales at discount stores across the country are predicted to grow 3.1 percent
from this year to 31.9 trillion won next year, while revenue for department
stores may rise 5.7 percent to 22.4 trillion won, market watchers said.
"The increased number of business-type supermarkets, or super supermarkets
(SSMs), will lead to a decrease in sales of discount stores," said Won Jong-moon,
a professor at Namseoul University.
Local retail giants like Samsung Tesco Co., operator of the Homeplus discount
chain, have been increasing the number of SSMs, waging a turf war with
mom-and-pop grocers.
In a bid to recoup lost growth, discount stores should go back to a low-price
model and expand their presence, said Kim Jin-hyuk, a research fellow at Samsung
Economic Research Institute.
Sales trends at major department stores and discount outlets in South Korea are
key indicators of Korean consumer sentiment
Sales at online shopping and convenience stores, meanwhile, are expected to
continue to grow next year, the market watchers said.
Convenience store sales are forecast to top 8 trillion won next year, while those
for online shopping companies may grow 11.5 percent, they said.
In particular, combined non-store retail sales including home and online shopping
are predicted to take the top spot in the retail market in 2015.
ksnam@yna.co.kr
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