Department stores last year posted another sluggish year, with sales edging up 1.6 percent to NT$340.1 billion (US$11.04 billion), as consumers increasingly turned to purchases online or at discount stores, Ministry of Economic Affairs data showed yesterday.
Department stores sales accounted for 8 percent of total retail sales last year, edging down from 8.1 percent in 2017, according to the ministry’s statistics.
Sales in the first two months of this year rose 1.9 percent annually to NT$55.9 billion, making up 7.9 percent of overall retail sales, the data showed.
Domestic department stores enjoyed stable growth from 2009, but sales growth waned from 6.1 percent in 2014 to 0.4 percent in 2017 before recovering slightly last year, the ministry said in a press release.
Department stores have also seen flagging sales in the US and Japan, with the former posting a 0.9 percent decline to US$149 billion and the latter a 1.7 percent drop to US$57.81 billion last year.
Department store sales accounted for only 2.8 percent of overall retail sales in the US, while their Japanese counterparts claimed 4.4 percent.
Sales are expected to continue to decline at physical stores as more people turn to online shopping amid shopping simplification efforts by e-commerce companies, such as the 1-Click patented by Amazon.com Inc, the ministry said.
Last year proved to be challenging to Taiwan’s department stores because of rapid changes in consumer behavioral patterns, e-commerce expansion and profit falls due to competitive pricing, the ministry said.
Because of the shift in consumer buying habits to online platforms, department stores saw stagnant sales contribution from pharmaceutical items, cleaning products and cosmetics, which stood at 13.8 percent in 2017 and 13.1 percent in 2016, it said.
Clothing and accessories remained the top sellers for department stores, although they saw a slight decrease from 40.4 percent in 2015 to 39 percent in 2017, it said.
The food service sector continued to gain in popularity, rising from 13.7 percent in 2016 to 14.9 percent in 2017, the ministry said.
Anniversary and Lunar New Year sales played a significant role in revenue, with the fourth quarter accounting for more than 30 percent of sales for the full year and the first quarter contributing more than 22 percent since 2014, it said.
To boost sales and respond more effectively to consumer needs, department stores have been revamping store designs, installing more popular food stalls and adding child-oriented facilities to cater to families, it said.
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