Shinsegae (a Korean department store operator) has lost 22.95% of its stock value over the past month. On Oct. 8 alone it fell 4.38% to close at KRW 305,500 (about $228). Over the same period, Hyundai Department Store fell 11.46% and Lotte Shopping (which runs Lotte Department Store as a business unit) fell 12.91%.
The usual explanation is that retail stocks are simply in a slump. Yet foreign shoppers have actually increased. From January through August, 15.05 million foreign tourists visited Korea, up 21.6% from a year earlier.
But the real story is elsewhere. The reason analysts point to is not the number of shoppers but the exchange rate. A falling won-dollar rate means the won is getting stronger, so foreigners get fewer won for the same dollars.
- How far did department store stocks rise, and how far did they fall?
In the first half of this year, the mood was the opposite. Shinsegae shares jumped 205.67% in the first half alone, while Hyundai Department Store rose 118.62% and Lotte Shopping 134.07%. Investors were betting on better earnings, driven by bonus payouts at chipmakers and a rise in foreign visitors.
Convenience store stocks followed the same path. Helped by store restructuring and more foreign customers, they rose in the first half. But over the past month BGF Retail (operator of the CU chain) fell 12.8% and GS Retail (operator of the GS convenience stores) fell 13.75%.
Put simply, the stocks that had been riding on foreign shoppers all turned around at once.
- Did foreign shoppers really increase?
Yes. In August alone, 2.25 million people visited Korea, up 23.3% from a year earlier, a record both for a single month and for the year to date. Foreigners' card spending on tourism from January through August reached KRW 14.018 trillion (about $10.5 billion), up 48.5% from a year earlier.
Shinsegae Department Store's flagship store also said its sales to foreigners rose about 231% from a year earlier in January through August. Looking only at the number of shoppers, the share price drop seems puzzling.
- So why did the exchange rate pull the stocks down?
The won-dollar rate fell from the 1,550 range in early July to 1,338.5 won on Oct. 8. That means each dollar now buys fewer won.
Take a tourist who arrives with $1,000. At 1,550 won per dollar, that converts to 1.55 million won; at 1,338.5 won, it is about 1.34 million won. The same $1,000 now buys about 211,500 fewer won, roughly 14% less (hypothetical calculation). That does not mean actual spending per person fell by that much.
Think of shopping online from overseas. When the dollar gets pricier, the same pair of American sneakers costs more in won, and you hesitate. For foreigners visiting Korea now, Korean goods have effectively become pricier in dollars. One difference: through August, the number of tourists did not fall. What the market worries about is how much each visitor will spend.
Here is the chain. The exchange rate falls → foreigners get fewer won for the same dollars → worries grow that department stores' sales to foreigners will shrink → the stocks fall. Kim Myung-joo, an analyst at Korea Investment & Securities, said these worries led to a lower valuation (share price relative to earnings) for department store companies.
- When the won gets stronger, where does Korean spending go?
A strong won also works in the other direction. Kim said department stores' same-store sales growth (sales growth at stores open more than a year) started to disappoint from June, and that this was not only because of lower sales to foreigners. A recovery in Koreans' demand for overseas travel, fueled by the stronger won, also played a part.
한국인에게는 해외 쇼핑이 싸진다. 100만 원을 달러로 바꾸면 1달러가 1,550원일 때 약 645달러, 1,338.5원일 때 약 747달러다(가정 계산). 백화점은 외국인 손님이 바꿔 받는 원화가 줄어드는 압력과, 한국인 손님이 해외로 나가는 압력을 함께 받는 셈이다.
- How do analysts see this drop?
Analysts expect the earnings worries tied to the strong won to be temporary. Their reasoning: as long as the won does not strengthen further, spending by the growing number of foreign tourists will offset it.
Convenience stores have an extra advantage with foreign customers. Lee Jin-hyup, an analyst at Hanwha Investment & Securities, said cigarettes make up only about 10% of foreign tourists' convenience store purchases, compared with 30% to 40% for Koreans. He expects growth in foreign tourists to boost not just sales but also profitability.
When Shinsegae shares rose 205.67% in the first half, expectations of more foreign visitors were part of the backdrop too. What has changed most since then is the direction of the exchange rate. The rate, in the 1,550 range in early July, was 1,338.5 won on Oct. 8. The currency market is watching the U.S. September consumer price index (CPI) and producer price index (PPI), due Oct. 14 and 15, and experts say the rate could fall to the low 1,300s this week depending on inflation.
- BITPRESS Insight
It is easy to assume that more foreign tourists means higher department store stock prices. But what a department store takes in is not the number of tourists; it is the won they spend. Even with more shoppers, if each one gets fewer won, the boost shrinks.
So for anyone holding stocks that benefit from foreign shoppers, like department stores and convenience stores, the direction of the exchange rate can move the share price before tourist numbers do. Analysts' view is that a stronger won deepens the worry, while if the won stops rising, the growing number of shoppers starts to matter again.
If you own a stock that benefits from foreign shoppers, ask first not "Did shoppers increase?" but "How many won are the dollars in their wallets worth?"
Sources
https://www.hankyung.com/article/2026100816356
https://www.hankyung.com/article/2026101145051
https://www.heraldk.com/article/2026092819365400723
https://kbmaeil.com/article/20260928500551
https://news.mtn.co.kr/news-detail/2026092815573982569
Glossary
Stronger won — When the won-dollar rate falls and each dollar buys fewer won, meaning the won's value has gone up.
Valuation — How expensive or cheap a company's share price is relative to the money it earns.
Same-store sales growth — Sales growth compared only among stores open for more than a year, leaving out newly opened ones.
BITPRESS articles are information to help your investment decisions, not a recommendation to buy or sell any stock or coin. Investment decisions and their results are your own responsibility.
