The 21st presidential election will be held on June 3, and domestic offline retailers will continue normal operations as usual. However, e-commerce platforms, including Coupang, will suspend delivery services for one day, designated as 'no delivery day' on election day. The retail industry is optimistic about the recovery of domestic consumption as the consumer sentiment that had been subdued after the election improves.
According to the retail industry on the 29th, major department stores in Korea, including Hyundai Department Store, Lotte Department Store, Shinsegae Department Store, and Galleria Department Store, will conduct normal operations at all stores on the 3rd of next month. A department store official noted, "Department stores designate regular holidays separately each month, so they operate on holidays, including the election day."
Generally, the department store industry practices a regular holiday once a month, excluding December, which is considered a peak season due to the end of the year and Christmas. Due to the characteristics of department stores operating on weekends, this measure aims to ensure minimum rest for workers.
Large discount stores like Emart, Lotte Mart, and Homeplus will also operate normally on election day. Warehouse-type discount stores (Emart Traders, Lotte Mart Max) and corporate supermarkets (SSM) like Emart Everyday, Lotte Super, and GS The Fresh will do the same. Large marts and SSMs can have obligatory holidays designated by the local government for not less than two times a month in accordance with Article 12 of the Distribution Industry Development Act, and typically, the second and fourth Sundays of each month are designated as holidays.
E-commerce companies, including Coupang, SSG.com, and 11Street, will temporarily suspend same-day delivery services on election day. This decision was made following the major delivery companies such as CJ Logistics, LOTTE Global Logistics, Hanjin Logistics, and Korea Post, which decided on a holiday to guarantee the voting rights of delivery workers.
In particular, Coupang will suspend weekly delivery on election day for the first time since the introduction of "rocket delivery" in 2014. However, delivery from offline discount stores and quick commerce services using delivery riders can still be utilized on election day without going through the logistics networks of delivery companies.
The retail industry expects that the political uncertainty following the election will be resolved, improving domestic consumption sentiment. According to the 'Consumer Trend Survey' released by the Bank of Korea on the 27th, the Consumer Sentiment Index (CSI) for May increased by 8.0 points to 101.8, compared to April (93.8). This is the largest monthly increase since October 2020 (+12.3 points).
A Consumer Sentiment Index above 100 indicates that consumer sentiment is optimistic compared to the long-term average (2003-2024), whereas a score below 100 indicates pessimism. Except for May of last year, the index remained above 100 from January to November. However, it plummeted to 88.4 after the military coup in December and remained in the 90s until last month.
The Monetary Policy Committee of the Bank of Korea lowered the base rate by 0.25 percentage points to 2.50% from the existing 2.75%. This action was prompted by the need for economic stimulus as the first quarter economic growth rate recorded a negative -0.2% due to domestic stagnation and export slowdown.
Yoo Jeong-hyun, a researcher at DAISHIN SECURITIES, noted, "The election serves as a very positive event that improves consumption patterns. It reflects expectations for the new government's policies," adding, "Especially, elections held after political uncertainties such as impeachment are expected to positively influence consumption trends and sentiment improvement."
Cho Sang-hoon, a researcher at Shinhan Investment Corp., said, "Consumer sentiment improved by an average of 3 percentage points following the last five elections since 2000," and noted, "If the new government that will be formed after the election pursues a large-scale supplementary budget, it is highly likely to be allocated first to the most urgent areas, which are private consumption and job creation."