Sales at major South Korean department stores fell for the second straight month in July as Europe’s turmoil weakened confidence during the summer holiday shopping season.
Outlays at the three biggest chains declined 1.3 percent in July from a year earlier after a 2 percent drop in June, the Ministry of Knowledge Economy said in a statement today. Discount-store sales slipped 8.2 percent last month, the report showed.
Consumer confidence fell to a five-month low in July, the same month the Bank of Korea unexpectedly reduced its benchmark rate to support growth. The central bank may cut again next month, helping to support demand, said An Ki Tae, an economist at Woori Investment & Security in Seoul.
“The decline in retail sales will probably bottom out this month or next month,” An said. “The rate cut expected in the third quarter wouldn’t fundamentally improve the domestic economy, but it would ease some of the burden for households that are in debt.”