May 03, 2014 08:12
Small stores and restaurants are reeling from noticeably shrinking consumer spending since the ferry disaster off the southwest coast.
The tragic deaths of hundreds of passengers, mostly students from a high school in Gyeonggi Province, appears to have cast a blanket of sadness across the country. This is evident not only in cancellations of parties and events by companies and public organizations, but in greater restraint among ordinary people, who seem to feel guilty about conspicuous consumption while the search for bodies continues.
Namdaemun Market in downtown Seoul, usually bustling this time of year with people buying gifts for Children's Day and Parents Day next week, was eerily quiet on Wednesday afternoon. Hardly any customers could be spotted around clothes stalls.
Scores of businesses have cancelled company picnics, while universities have put off their annual spring festivals and schools have called off field trips.
This trend has caused businesses that cater to these annual events to lose money during what is normally one of the busiest times of the year. May usually means booming business for party planners and event organizers, since Children's Day, Parents Day, Buddha's Birthday and Teachers Day all fall this month.
Cabbies and limousine drivers have seen earnings dwindle as few Koreans go to company dinners or have drinks after work. "Who on earth would go around drinking until 2 to 3 a.m. when the entire nation is mourning?" one driver said. "I completely understand that, but I can't wait until spending picks up."
Credit card spending has also dropped markedly. Hyudai, Samsung and Shinhan credit card companies have seen transactions drop more than 10 percent since the accident on April 16, compared to March.
"Since the disaster, there has been a spreading awareness that we should refrain from drinking and having fun, and this translated into a sharp drop in credit card spending," a staffer with a credit card company said.
Leisure, beauty and restaurant businesses have been hit especially hard.
Shin Min-young at LG Economic Research Institute, said, "Both the wealthy and poor are keeping their wallets shut due to the atmosphere of mourning for the victims of the Sewol, and small businesses like clothes shops, restaurants and other retailers are the first to feel the pinch."
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