An empty store displays a “for lease” sign. (Yonhap)
Beset by curfews and fewer customers amid the coronavirus pandemic, the retail industry in South Korea is now pinning hopes on a business rebound, as the government is set to ease long-enforced strict restrictions under the "Living with COVID-19" scheme set to be introduced next month.
Department stores, supermarkets and other retailers are expected to be among those likely to benefit, given that eased restrictions on gatherings and business operations will bolster consumer sentiment and bring customers to brick-and-mortar stores.
The government is now gearing up for the introduction of the "Living with COVID-19" campaign from Nov. 1, under which COVID-19 will be treated as an infectious respiratory disease, like seasonal influenza, and most distancing measures will be eased.
That is aimed at helping people get back to normalcy after protracted disruptions in their day-to-day life and giving more leeway for businesses that have borne the brunt of the fallout of longer-than-expected antivirus measures.
Experts and industry watchers see the introduction of "Living with COVID-19" as positive, saying it will help improve consumer sentiment that has been long gripped by the pandemic.
"For department stores, 'Living with COVID-19' is expected to improve consumer sentiment ... good performance can be expected either from late 2021 or early 2022," Hana Financial Investment Co. wrote in its report about the potential influence of "Living with COVID-19" on local industries.
Retail sales have enjoyed a recovery in sales in recent months after they suffered a tumble in the wake of the coronavirus outbreak that hit South Korea in early 2020.
Government data showed the combined sales of major offline retail stores advanced 8.6 percent on-year in the first half of the year, led mostly by department stores whose sales shot up 26.2 percent largely from the same period a year earlier.
Large-scale grocery chains, supermarkets and convenience stores are also cited as beneficiaries from eased rules on gatherings and movement under the "Living with COVID-19" scheme, observers said.
"Convenience stores are expected to adjust comfortably to the 'Living with COVID-19' campaign ... 'Living with COVID-19' may trigger their earnings' turnaround," Yuanta Securities Co. wrote in a report.
The country's big-three grocery chains -- E-mart, Lotte Mart and Homeplus -- expressed cautious optimism ahead of the introduction of the "Living with COVID-19" scheme, as their offline businesses have suffered a lot since the outbreak of the coronavirus.
"We are expecting that the government's declaration of 'Living with COVID-19' will help reduce the negative feelings about going out," an official of a major grocery and hypermarket chain said, asking for anonymity. "The impact may vary on different industries, but for offline retail business, ("Living with COVID-19") is definitely a plus factor."
Duty-free stores are also hoping for a rebound after they have been buffeted by the coronavirus that brought global travel to a virtual standstill.
Among them, Lotte Duty Free, one of South Korea's leading duty-free retailers, will likely benefit from a "travel bubble" reached between South Korea and Singapore that will exempt fully vaccinated people from mandatory quarantine upon entry into each other's territory, beginning Nov. 15.
Lotte Duty Free also resumed its overseas expansion projects for Danang and Sydney that had been suspended amid the fallout of the pandemic.
"I feel less scared about the COVID-19 frenzy now compared to last year and am willing to spend a longer time shopping in the duty-free corners next month for family presents," said Chris Chung, a professor in Singapore, who plans to visit Seoul around the time of the launch of "Living with COVID-19."
So far, Hawaii, Guam and Maldives are exempt from the two-week self-distancing duties for inoculated travelers who submit their polymerase chain reaction (PCR) results.
Despite such overall optimism, experts said it will still take much more time before retail sales return to post-coronavirus levels, given that people will remain wary about the pandemic for the time being amid reports coming out on more than a thousand daily infections.
In a report, Kyobo Securities said household consumption is likely to continue to grow this year on government support for domestic spending and pent-up demand for outdoor activities.
But the potential resurgence of the COVID-19 outbreaks and the following prolonged social distancing restrictions may remain as downside risks for the domestic economy, it added.
As of Monday, 64.6 percent of the 52 million population were fully vaccinated and 78.7 percent had received their first shot.
The government expects the rate to exceed the 80 percent mark before beginning the "Living with COVID-19" campaign, considering 78.7 percent of the population had their first of the two-dose inoculation. (Yonhap)