Frozen Consumption

The consumption has been frozen rapidly not only in peoples’ mind but also in reality.

As the sales of department stores and conventional markets turned to a decreasing tendency, motorcar companies started the year-end discount sale.

According to ‘Sales trend of large distribution companies for November’ published by the Ministry of Commerce, Industry and Energy on December 11, The sales of the department store decreased by 2.9% over last November. Also, sales of discount stores increased only by 2.4%.

▽ Sales Decrease of Department Store 〓 In September, the sales of the department store decreased by 1.4% and turned to a downward trend after a lapse of 15 months. Then, it increased by 6.7% in October and so made a reserve turn to the downward trend again. The increase rate of sales of discount stores of November is 2.4% and is lower than 9.6% of October.

The Ministry of Commerce, Industry and Energy forecasted that the sales of the department store will decrease by 3.8% in December. Also, it forecasted that the increase rate of sales of the discount store will be 0.3%, the lowest point in the year.

Kim Seong-Hwan, chief of distribution service information section, the Ministry of Commerce, Industry and Energy said, “the sales of distribution industry is one of major index of the home consumption business. In general, it is because the consumption psychology has largely contracted and the credit card issuance of delinquent customers was interrupted.”

▽Frozen car sales 〓 Domestic market of the car has been frozen.

Such as Hyundai, Kia, Daewoo and Renault Samsung, the domestic sales of 7 motors companies of the end of November were 127,804 cars decreased by 11.5% over 144,457 cars of October. There were 59,540 sold cars of Hyundai Motors in November, decreased by 12% over the previous month. Except Renault Samsung, motorcar companies started the year-end discount sales up to the maximum 1.2 million won according to the car type.

The secondhand car market has continued to decrease for three months after September. Latest, total secondhand cars of Seoul Motorcar Auction House were 500 cars per day, decreased by 200 cars over the usual day. The selling price of the secondhand car dropped by over 500,000 won.

▽ Cold Wave in Conventional Market 〓 The conventional market has been in difficulties because of the frozen domestic economy and cheap Chinese products. Merchants of Dongdaemun market and Namdaemun market said, “After the winter, customers started to decrease and will be continued until the end of the year. Approx. 20% customers decreased and sales decreased.”

A janitor of a parking management office of ‘Mesa’ said, “The parking cars are directly connected to the sales of the store. In the beginning of the year, 800∼1000 cars were daily parked but, these days, 700∼900 cars are parked.”

One official of a fashion industry forecasted, “From the middle of the last month, the sales decreased, and were down by 40% over the same period of last year. We cannot help increasing the business scale next year.”

▽ Decrease of Consumer Evaluation Index 〓 The consumer evaluation index of October was 86.8 and decreased to the level less than 100. When the index is smaller than 100, it means that the will decreases. Also, the consumer expectations index was 97.1, decreased to the below 100 for the first time in the year. It showed that the consumption psychology has largely been contracted.