South Korea retail sales show sign of recovery: report

Fitch noted the country posted growth as high as its pre-pandemic levels.

South Korea’s retail sales have started showing signs of recovery as consumer confidence remain optimistic, Fitch Solutions reported.

Consumer confidence indicator has trended above 100 since March 2021, which was a level seen before the pandemic hit. According to Fitch, this optimism has reflected in the country’s retail sales data.

Retail sales “are now posting growth on pre-Covid-19 levels,” the report read in part.

The research firm, however, noted that whilst top-line figures show “solid growth,” sub-segments reflect a mixed recovery.

“E-commerce has done particularly well, now accounting for a quarter of all retail sales in the country. As of writing (February 2022), retail sales in South Korea returned to positive growth, albeit aided by low base effects,” according to Fitch.

Retail sales in December 2021 grew 6.5% year-on-year, following a -2.1%YoY contraction in the same month in 2020.

“Retail sales have now posted positive growth over the whole of 2021, indicating that consumer spending has begun its recovery from the negative impacts of Covid-19,” Fitch reported.

Fitch had also projected household spending in South Korea to grow by 3.4% to $663.5b in 2022, exceeding its pre-pandemic levels.

Related: South Korea household spending to rise by 3.4% in 2022

Whilst this is lower than the 3.7% real growth in 2021, Fitch noted spending is “returning to its medium-term trajectory.”