Retailer confidence sinks for Q1 on inflation, other negatives

Customers shop at a supermarket in Seoul, Jan. 1. Yonhap

Korean retailers' business sentiment worsened for the first quarter of this year amid high inflation, soaring interest rates and other negative factors, a poll showed Wednesday.

The Korean Chamber of Commerce and Industry (KCCI) said its retail business survey index (RBSI) stood at 79 for the January-March period, down from 83 three months earlier.

The RBSI is based on a poll of 500 retail businesses across the nation. A reading below 100 means that pessimists outnumber optimists.

"The decline comes as consumer sentiment has been hurt by high consumer prices and borrowing costs," the KCCI said. "The fallout from high interest rates has also been spilling over into housing, stocks and other assets."

Readings for department stores, discount stores, supermarkets and online retailers were all below par, with the figure for department stores rising to 99 from 88.

The figure for supermarkets gained to 77 from 67 over the cited period, while numbers for convenience stores, discounters and online retailers declined.

The survey also showed 36.4 percent of the respondents picking rising costs as their biggest managerial huddle, followed by prolonged high inflation with 21.4 percent and fiercer market competition with 14.2 percent.

Consumer prices in Asia's fourth-largest economy rose 3.6 percent on-year in 2023, though it slowed from a 5.1 percent jump the previous year. Currently, the country's benchmark interest rate stands at 3.5 percent. (Yonhap)