While exports and corporate earnings are surging amid the semiconductor boom, a chill still lingers in local neighborhood commercial districts. Although total credit card transaction volume has increased, payments in daily-life-related sectors such as restaurants have actually decreased; even small business owners whose sales have risen are unable to turn a profit due to rising costs.
As financial difficulties lead to staff cuts and loan delinquencies, the challenge of translating export-driven growth into sales and income for local businesses has emerged as a key task for domestic economic recovery.
◇Total Card Payments Rise, but Restaurant and Leisure Spending Declines
According to calculations based on the Credit Finance Association’s “Q3 2026 Credit Card Authorization Statistics” released on the 2nd, the total value of credit card authorizations (individual and corporate) in the third quarter of this year increased by 11.2 trillion won compared to the same period last year. However, the combined authorization value for the accommodation and restaurant sector and the arts, sports, and leisure services sector decreased by 338 billion won.
Approved spending in the lodging and restaurant sector totaled 40.38 trillion won, a decrease of 235 billion won (0.6%), while the leisure sector—which includes performance venues, golf courses, and amusement parks—totaled 4.29 trillion won, a decrease of 103 billion won (2.3%). While the base effect resulting from last year’s distribution of consumer coupons may have played a partial role, this trend contrasts with the overall increase in total card transaction volume.
On the other hand, payments related to travel and healthcare increased. Card transaction volume in the transportation sector rose 7.8% driven by travel and mobility demand, and the health and social welfare sector also saw a 4.2% increase due to higher use of hospitals and clinics. There were also significant differences by distribution channel. From July to August, sales at department stores and online shopping transaction volumes increased by 8.0% and 7.3%, respectively, while sales at large supermarkets decreased by 4.4%.
Small business owners’ perception of the economy has worsened. According to the Korea Small Business Corporation, the Small Business Sentiment Index for October stood at 73.2, down 3.3 points from the previous month. The retail sector, in particular, saw a 9.2-point decline.
Posts expressing hardship—such as “It’s like the IMF crisis, except for semiconductors” and “Honestly, things were better during the COVID-19 pandemic”—are appearing in self-employed communities. One particularly striking complaint noted that on the very day SK Hynix posted its highest-ever operating profit, the poster recorded their lowest-ever sales. This highlights the gap between the strong performance of export-oriented companies and the economic conditions experienced by local shops.
◇Sales Rise, but Profits Stagnate… Employment Falls and Delinquent Payments Rise
Even for stores with increased sales, profit improvement remains sluggish. According to a second-quarter survey of small business owners by Korea Credit Data, average sales per business increased by 2.04 million won compared to a year ago, but expenses also rose by 1.94 million won. The increase in profit was only 100,000 won, meaning that approximately 95% of the sales growth was offset by higher expenses.
While it is difficult to raise prices due to concerns about competition and losing customers, it is equally hard to immediately cut expenses necessary for maintaining a business, such as rent and labor costs.
Mr. B, a coffee shop owner in his 30s, said, “The purchase price of coffee beans has risen significantly in recent months, so I’m debating whether to raise the price of an Americano.” He added, “I’m worried about how regulars will react even if I raise the price by just 500 won, but if I keep prices the same, my margins will continue to shrink.”
These financial difficulties are also manifesting in job cuts. In September, the number of employed people in the lodging and food service industry fell by 97,000 compared to the same month last year. This marks the largest decline in 5 years and 7 months, since February 2021. Across all sectors, the number of self-employed individuals with employees decreased by 8,000, while the number of self-employed individuals without employees increased by 49,000. As seen in the case of Mr. A, who decided to cut staff, the difficulties faced by the self-employed are becoming evident in the workplace as well.
The burden of debt repayment is also growing. According to the Bank of Korea, the delinquency rate on loans to self-employed individuals stood at 1.99% at the end of the second quarter of this year, up from 1.86% at the end of last year. In particular, the delinquency rate among vulnerable self-employed individuals—those with multiple debts who are low-income or have poor credit—reached 12.71%. This indicates that a significant number of self-employed individuals are struggling to repay loans amid sluggish sales and rising costs.
Kim Dae-jong, a professor in the Department of Business Administration at Sejong University, pointed out, “The semiconductor industry is export-driven and generates enormous profits in the global market, but those gains do not directly translate into increased sales for domestic self-employed individuals.” He added, “If the profitability of the self-employed deteriorates, they will cut back on employment, and a decline in workers’ incomes could in turn lead to a contraction in consumption.”
