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Growth of Korea retail sales slows in July

Growth of Korea retail sales slows in July

The growth of retail sales in South Korea slowed down last month due to weak performance by online malls amid fierce market competition, government data showed Wednesday 30 October.

The combined revenue of 26 offline and online retailers reached 10.22 trillion won (US$9 billion) in July, up 3.6 percent from 9.87 trillion won tallied the previous year, according to the data from the Ministry of Trade, Industry and Energy.

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The on-year gain in July marked a deceleration from 7.2 percent, 6.3 percent and 7.2 percent growth posted in April, May and June, respectively.

The slowdown was largely attributable to the drop in sales of online open markets, such as eBay and 11st, according to the data.

Sales at 13 major online shopping malls rose 4.4 percent last month, after posting double-digit growth for five straight months since February.

The sales of the other 13 offline-based retailers, including department stores, discount chains and convenience stores, meanwhile, rose 3.2 percent on-year in July on the back of strong performance by convenience stores.

Convenience stores saw their sales gain 11.1 percent last month, with hypermarket chains posting a 1.7-percent growth in their sales and department stores’ revenue sliding 1.3 percent, according to the latest data.

For all industries, output rose 1.2 percent in July from a month earlier to stay in positive terrain for the first time in four months, while it increased 1.5 percent from a year earlier, the data showed.

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The statistics agency said that private consumption seems to be in a recovery cycle as the seasonally adjusted retail index hit a record 122.7 last month.

“But in the coming months, there are some downside pressures,” said Eo Woon-sun, director of the short-term industrial statistics division at Statistics Korea.

“The escalating North Korean issues, which already dragged down the stock market, will likely dampen consumer and producer sentiment,” he concluded.