The Korea Chamber of Commerce and Industry, led by Chairman Choi Tae-won, conducted a survey among 500 retail businesses in Seoul and six major cities, evaluating the Retail Business Survey Index (RBSI) for Q4 2026. The index is reported at 88, marking a 4-point decline from Q3's figure of 92.
The RBSI quantifies the retail sector's outlook for the upcoming quarter relative to the current one, with values above 100 indicating a more positive expectation for future performance. This decline follows a temporary uplift in Q3, driven by summer holiday and seasonal market optimisms. However, the current reading is above the five-year average of 83, reflecting a transition to a moderate adjustment phase rather than a significant downturn.
Several factors contributed to this drop, including cautious household spending, the rise of selective and frugal consumption patterns, and the seasonal off-peak for convenience stores. Among the businesses forecasting a downturn for Q4, 70.0% identified cautious household spending as the primary factor. Other concerns included weak year-end sales effects (8.9%) and customer migration to alternative shopping channels (7.9%).
In terms of consumer purchasing behavior, 78.4% of respondents noted similar or increased preference for cost-effective products, with 45.2% stating it remained the same and 33.2% indicating it had increased. Moreover, 83.6% mentioned that the share of purpose-driven, smaller purchases remained stable or had gone up, with maintenance at 47.0% and an increase at 36.6%.
Department stores reported a slight decrease from 139 to 130 but maintained the highest index among retail formats. Expectations for Q4 were bolstered by the anticipated sale of high-priced winter outerwear and ongoing demand from foreign tourists during the year-end gift-giving and gathering seasons.
Hypermarkets held steady at 111, continuing to exceed the baseline of 100 for two consecutive quarters. This stability is attributed to seasonal demand for essential groceries, particularly during the kimjang (preparation of kimchi) season in November and December, alongside store renovations focused on fresh food and beverages.
Online shopping, having risen from 74 to 82, illustrated a rebound in consumer activity. Increased attention to price comparisons and the use of overlapping discount coupons highlighted shifts in consumer behavior, compounded by cooler weather leading to heightened online grocery shopping preferences.
Conversely, convenience stores suffered a notable decline, plunging 48 points from 127 to 79. This significant drop results from a high baseline effect from the previous summer's extreme heat, coupled with reduced outdoor activities and corresponding consumption in the winter season.
Supermarkets also fell short, recording a drop to 73 from 85. The intensified competition from hypermarkets, which are engaging in large-scale year-end promotions, alongside the migration of grocery demand to e-commerce platforms, is seen as detrimental.
Lee Seung-ryun of the retail logistics policy team at the Korea Chamber of Commerce and Industry remarked that despite expectations for seasonal year-end sales, the retail environment is marked by a clear divergence in performance across different segments due to cautious consumer spending and intensified competition among distribution channels. He pointed out that the potential for short-term recovery in the retail economy appears limited.
