The number of customers buying luxury goods for the first time at department stores rose in the first half of this year, industry data showed. Analysts attribute the increase in luxury demand at Korean department stores to a wealth effect stemming from the stock market boom. Luxury consumption, once centered on VIPs, is spreading to general shoppers and driving department store luxury sales, according to analysts.
Among customers who purchased luxury categories at Korea's top three department store operators—Lotte, Shinsegae, and Hyundai—in the first half of this year (January to June), those with no record of luxury purchases in the previous year accounted for an average of 62.8 percent, according to the retail industry Wednesday.
By store, Hyundai Department Store had the highest share of new luxury buyers at 67.1 percent, followed by Shinsegae Department Store at 61.3 percent and Lotte Department Store at 60 percent. The share of incoming new customers has been rising year by year. In particular, Lotte Department Store and Shinsegae Department Store saw their share of new luxury buyers exceed 60 percent for the first time in the first half of this year.
Analysts point to a combination of the wealth effect from the stock market rally and the impact of the high exchange rate as the backdrop. Rising stock prices increased disposable income, while a surging won-dollar exchange rate raised the burden of overseas spending, boosting consumption at domestic department stores. When buying luxury goods abroad, exchange rate burdens plus tariffs are added, strengthening the price competitiveness of luxury goods at domestic department stores, which is also cited as a factor.
"New customers buying luxury goods are increasing as a trend," a department store industry official said. "In the past, luxury sales were centered on VIP customers, but recently, due to the stock market boom and other factors, general customers are showing demand, thinking, 'Maybe I'll buy one.'"
In addition, the rise in the number of marriages is cited as a factor supporting first-time luxury purchase demand, as wedding gift demand from marriages also increases. According to the "April 2026 Population Trends" recently released by the National Data Office, the number of marriages in April was 20,622, up 9 percent from the same month a year earlier. On an April basis, it is the highest level in 10 years since 2016 (22,844).
The expansion of wedding gift demand is also confirmed in department store sales. According to Lotte Department Store's analysis of June sales by product category, luxury jewelry and watch sales grew 60 percent and luxury goods sales grew 40 percent year-on-year. Over the same period, Shinsegae Department Store's luxury jewelry and watch sales rose 67 percent and 31 percent respectively, while Hyundai Department Store's high jewelry sales increased 55 percent from a year earlier and luxury goods sales grew 35 percent.
Driven by luxury sales growth, expectations for a second-quarter earnings surprise in the department store industry are also rising. In particular, the overall improvement in consumer sentiment is a positive factor. According to the "June Consumer Trend Survey Results" released by the Bank of Korea on the 23rd of last month, the consumer sentiment index in June was 106.6, up from 106.1 the previous month. The consumer sentiment index is calculated by combining six indices of the Consumer Survey Index (CSI). A reading above the benchmark of 100 indicates optimistic consumer sentiment, while a reading below 100 is interpreted as pessimistic.
NH Investment & Securities forecast that all three department store operators would post record-high results for the second quarter. In particular, it projected that same-store growth would be highest at Shinsegae Department Store, which has the largest luxury share, at 26 percent, followed by Hyundai Department Store at 16 percent and Lotte Shopping at 13 percent.
"The backdrop for consumer sentiment remaining optimistic is the wealth effect," said Joo Young-hoon, a researcher at NH Investment & Securities. "In fact, as the KOSPI rally began in earnest, the growth rate of the luxury category within department stores was analyzed to have risen sharply." He added, "Luxury goods are showing the highest growth rate among department store categories, with sales growth of more than 30 percent year-on-year continuing."
