Frozen Purse in "50% Discount "

In the afternoon of December 27, in a main branch of Lotte Department Store located in Sogong-dong Jung-gu Seoul, the cloth stores of ‘Marathon discount’ seemed to be full of customers from the beginning of December. However, one sales clerk said, “despite the discount of 30∼50%, only or two customers out of ten customers buy the goods.”

Consumers closed their purse. The consumption psychology was frozen even in December. Merchandisers sighed, “Since a financial crisis, the business has been worse and there is no bright business prospect of the business.”

▽Frozen year-end of large stores 〓 Lotte Department Store showed sales from December 1 to 25 decreased by 17.5% over the same period of the last year. It was the lowest figure after the financial crisis. Other department stores such as Hyundai Department Store and Shinsegae Department Store are in the same situation. Jang Hye-Jin, vice-chief of Shinsegae Department Store said, “The sales of two Christmas days (December 24 & 25) decreased by 7% over the last year.”

The discount stores which grow by above 10% over the same period of last year, are also in the bad situation. They came to the crisis which the business showed the minus growth of 1∼9% for the first time and such an tendency will be continued next year.

Gim Yeong-Ung, buyer of electric home appliances, Samsung Tesco Home Plus signed, “The consumption of electric home appliances such as PDP TV, Kimchi Refrigerator has decreased little by little. The credit card customer largely decreased in number and customers didn’t open their purse in spite of 6 months no interest installment.”

Stores of luxury goods such as Prada didn’t show the remarkable sales even in 20∼30% discount from the month. One official of the department store said, “Showing the growth tendency until October, the sales of the luxury goods stores dropped to -4% in November and -10% in December.”

▽Commoners have no good business 〓 a conventional market, electric mall and major stores of Seoul downtown have suffered from the bad business.

Mr. Han, director of L salon in an entrance of Ewha Womans University said. “Customers decreased to the half in number and most of customers have a hair cut of a cheap price.

Han Gi-Hong, director of Dongdaemun Parking Lots Business said, “The number of parking cars decreased to 15,000 cars for one month of December over the last year. The regional merchants who visited once a week, come once a month.” Jin Seong-Hun, the president of the Dongdaemun cloth store said, “I am thinking about a change of the business. Don’t think it is a courtesy grumbling of traders.”

The consumption reduction is shown in an empty pub. Lim Seok-Jun, president of liquor wholesales company said “I had supplied 500 boxes of liquors to stores in Shinchon for 4 days before/after last Christmas, but I supplied just 400 boxes this year. The sales of draught bear and Soju decreased by 40% and 10% respectively”. Park Byeong-Seok (50), tax driver said, “I used to earn at least 10,000 won per hour, but I have earned 6,000∼8,000 won per hour. My fellows drive the empty car.”

▽Cause and Wave of Consumption Fall 〓 The frozen consumption psychology was caused by the external uneasy factors of the nuclear of North Korea and risk of Iraq-US war and the government policy of the restricted household loan and issuance of the credit card.

Heo Jin-ho, a deputy-chief of the policy team, Bank of Korea said, “The household credit reduction policy of the government and the stock price decline owing to the foreign unfavorable factors accelerated the depression. Until the first half of next year, there will be such an situation.”

As the consumption contributes 3.4% points among 5.8% of growth rate of GDP of the third quarter, the consumption supported the economy. Because of it, there is a worry that the consumption depression will deepen the business slowdown.

Park Jin, analyst of LG Investment Securities said “As the uncertainty of the foreign business reflecting the domestic business is getting larger, we have to protect the depress of the business.”

An expert of the government institute said, “Because the recent household loan restriction policy of the government is focused on the restriction, there is a worry of the credit stringency. We must control a tempo not to contract the consumption rapidly.”

However, there is an objection that the consumption depression is a natural situation as the consumption led the economy abnormally so far. Shin Yong-Sang, researcher of the economy team, Korea Institute of Finance forecasted, “Among the consumption, investment and exports leading the economy, the exports have been relieved from hard ship. If the foreign economy of next year show the slow recovery tendency, there will be no large influence owing to the consumption reduction.”

Also, Samsung Group and LG Group decided to extend the facilities investment for next year. It became an affirmative factor.