Convenience sales slip amid weakening consumer sentiment

South Korea’s convenience store sales fell in the first quarter of 2025, marking the first year-over-year decline since quarterly statistics were first published in 2013. The 0.4% drop breaks a 12-year streak of steady 5%–10% quarterly growth and is being blamed on waning consumer confidence amid a broader economic slump.

“The news of negative growth in the first quarter came as a major shock to the industry,” said a convenience store chain official. “Convenience stores rely heavily on impulse buying, so they are more vulnerable to changes in consumer sentiment than other retailers.” These stores typically attract unplanned, low-cost purchases, and the fact that even this type of spending is falling suggests the economic downturn is hitting home.

The Bank of Korea’s Consumer Sentiment Index remained below 100 for five straight months through April, after dipping to 88.4 in December. A reading below 100 means more consumers are pessimistic about the economy than optimistic.

The downturn isn’t isolated to convenience stores. In the same period, the nation’s top department store chains—Lotte, Shinsegae and Hyundai—also posted year-over-year declines.

The one bright spot in the sector was Emart, South Korea’s leading big-box retailer. Analysts say food sales, considered essential spending, held steady and that Emart’s pricing power helped attract budget-conscious shoppers shifting away from discretionary purchases like clothing and accessories.

Meanwhile, the number of self-employed workers has continued to decline. In April, the figure dropped by 6,000 from a year earlier to 5.615 million. Self-employed business owners with staff have decreased for seven straight months since October, while single-person businesses have risen for three months in a row.

Sluggish domestic demand, driven by deteriorating consumer sentiment, is weighing on employment and overall economic growth. Worse yet, most industry insiders believe the slump will persist. A recent survey by the Korea Chamber of Commerce and Industry found that the Retail Business Survey Index (RBSI) for the second quarter was 75, down for the fourth consecutive quarter since the second quarter of last year (85). A reading below 100 means more companies expect worsening conditions than improvement.

Nearly half of the 500 retail businesses surveyed, including department stores, supermarkets, and convenience stores, don’t expect a recovery until sometime next year. Some 11.2% projected a recovery in 2027, while 16% said it would come even later.

For many South Koreans, this downturn feels worse than the 1997 financial crisis or the COVID-19 pandemic. Not only are small business owners facing the brunt of the slowdown, but salaried workers are also under pressure as incomes stagnate and inflation erodes disposable income.

A recent report by Hyundai Research Institute warned that South Korea must reinforce domestic demand as a buffer before export-driven growth falters. With consumption now the key to economic recovery, the next administration should prioritize policies revitalizing the domestic market.


Soo-Jung Shin crystal@donga.com