Restaurant Industry Faces Serious Financial Problem due
to COVID-19 … Debts Increase 19 Percent to $18.5 Billion
Summary: The top five Korean commercial banks reported that
their loans to restaurants and foodservice establishments totaled 22 trillion
won ($18.5 billion USD) at the end of May, up 19 percent from January.
Many restaurants relied on commercial loans and government credit programs to
maintain business during the COVID-19 outbreak. Although consumer traffic
and spending in the restaurant industry are on a gradual recovery, many
restaurants continue to face serious financial problems. Restaurants are
worried that the recovery trend may come to an end soon as COVID-19 government
relief funds provided to families for spending in small-to-medium retail stores
and restaurants have almost run out.
Families Reduce Spending as They Run out of Government
COVID-19 Relief Funds
Summary: According to the Institute of Korea Credit Spending
Data, consumer credit card spending increased during the last two weeks in May
as a result of government COVID-19 relief funds that were sent to all
families. However, credit card spending declined in June as families ran
out of relief funds.
Department Stores Report Strong Sales Growth for Luxury
Brands during the COVID-19 Outbreak
Summary: Leading Korean department store chains reported
that sales of luxury brand products generated strong growth during the COVID-19
outbreak. Shinsegae Department Store saw 37.8 percent sales growth in its
luxury brand products in May compared to the same month last year. Lotte
Department Store and Hyundai Department Store also saw 19 percent and 25.3
percent growth in luxury brand products in May respectively. Marketers
explain that Korean consumers are seeking self-rewards or indulgent experiences
by purchasing luxury products under pressure of the on-going COVID-19 outbreak.
COVID-19 Consumption Trends ... Extended Home Life Boosts Sales of Body Scrub, Prepared Rice Meal, and Air Fryer
Summary: There has been strong sales growth in products related to life at home due to COVID-19. Notable examples include body scrub products (44 percent growth during June 1-17 compared to last year - CJ Oliveyoung stores), prepared rice meals (36 percent growth during May 1 - June 10 - GS25 convenience store chain), and air fryers (516 percent growth during January through May - Junjaland electronics store chain).
Single Member Households Exceed 6 Million
Summary: The Korea Statistics Office (KSO) reported single member households in Korea totaled 6.03 million in 2019, 15 percent higher than in 2015. Single member households accounted for 29.9 percent of total households in the country. KSO said that delayed marriages among young generations as well as an increase in the elderly population caused the growth in single member households. KSO said that 60.8 percent of the people living alone were employed.
TMON Introduces Free Return Policy on Fresh Agricultural Products
Summary: TMON, a major on-line retailer in South Korea, announced a free return policy on fresh agricultural products on June 24. TMON said consumers can return their purchases back to TMON for free if they are not satisfied with the quality. Consumers should make the return decision within a day of receiving the products. TMON said this policy is to encourage consumers to purchase more fresh agricultural products on-line.
Dr. Jung's Food to Expand Contract Purchases for Local Soybeans
Summary: Dr. Jung's Food, the leading processor for soy milk and beverages in South Korea, reported that it would expand contracts with local soy farms to purchase 600 metric tons this year, three times more than last year. Dr. Jung's Food mainly worked with local contract farms to purchase black soybeans in the past. The contracts will include regular beans beginning this year.
Convenience Stores to Offer More Health Functional Foods as Young Consumers Pay More Attention to Health
Summary: Convenience stores are introducing an increased number of health functional foods as their main customers, young consumers, pay more attention to health issues during the COVID-19 outbreak. Seven Eleven Korea reported that its sales of health functional foods increased by 72 percent during January through April this year compared to the same period last year. Some of new products newly introduced include 'Good Morning Milk Thistle Hutgae' extracts (by Chunho & Care), 'Himalayan Milk Thistle' drinks (by Yuhan Health Life), and 'Prebiotic Bio Tea' drinks (by Bio Tea).
COVID-19 Took Bigger Toll on People with Part Time Jobs ... 52% Reports Decreased Income
Summary: A recent survey by a NGO group (Job Security 119) revealed that COVID-19 had a bigger economic impact on people with part time jobs. 26.3 percent of part time employees surveyed reported that they experienced job loss during the last six months during COVID-19, which was 6.7 times higher than full time employees (4 percent). 52.8 percent of part time employees experienced income decline during the period, 2.7 times higher than full time employees (19.2 percent).
People in 30's are the Leading Cafe Consumers, EDIYA Coffee
Summary: EDIYA coffee, the leading cafe franchise in South Korea with over 3,000 stores, reported its 'consumer report 2010' on June 22. According to the report, people in their 30's were the leading consumers, purchasing 20 percent more than other age groups. People in their 30's were also leading purchases for ready-to-drink products (RTD). On the other hand, people in their 20's were opting for value products as they preferred extra-large size cups. People in their 40's showed more interest in trendy recipes. People in their 50's and older preferred hot drinks.
Dongwon F&B Launches 'Beautic' Inner Beauty Functional Foods
Summary: Dongwon F&B, a leading food processor in South Korea, reported that its first inner-beauty functional food brand, Beautic, was launched on June 21. Dongwon F&B said Beautic products target women in their 30-50's with active ingredients such as collagen and dietary fiber.