Conglomerates cancel commercial events following Itaewon crowd crush

South Korean conglomerates are canceling promotional events through to the end of the year, following the tragic deaths of more than 150 people in the capital city of Seoul on Saturday evening. 

Local police have identified 154 victims, including 26 foreign nationals, who died during a crowd crush in Itaewon, an area famous for its annual Halloween celebrations. 

The retail juggernaut Shinsegae Group put a stop to its largest promotional sales event, which was scheduled to run for 12 days from Nov. 11. The sale period was planned to be longer than usual to celebrate the company's acquisition of Gmarket earlier this year. 

The SSG Day annual sale is the retail giant's biggest shopping event with 19 affiliates taking part, namely the big-box store E-Mart, the upscale department store Shinsegae Inc., and online retailer SSG.COM.

“We have decided to cancel large-scale events that were supposed to kick off the coming weekend, in accordance with the national mourning period,” a Shinsegae employee told The Korea Economic Daily. 

Conglomerates including Samsung Electronics Co. will refrain from distributing press releases during the mourning period. 

The opening ceremony for South Korea’s biggest sales event Korea Sale Festa was also called off on Monday. 

Approximately 2,500 retailers and manufacturers were to set to participate in this year's event, slated to run through Nov. 15. The opening ceremony was to be staged in Myeongdong. 

For corporations big and small, it’s all hands on deck when it comes to social media accounts and press releases. The corporate image of Kakao Group and SPC Samlip Corp. have plunged in recent months, and have further worsened  with communications strategies that were misaligned with what the public wanted. 

“Companies are now prioritizing crisis management – to the point of valuing the so-called ‘mind share’ over ‘market share,’” an industry insider said.

Experts forecast consumer sentiment to cool rapidly, as even local governments are urging establishments to close their businesses during the national period of mourning. 

Department stores and discount retailers are expected to be the most heavily affected. Retailers generally record the highest revenue during the last two months of the year. 

Department store and big-box store revenue plummeted 7% and 14%, respectively, following the sinking of MV Sewol in April 2014; while the plunge was even steeper during the height of the Middle East Respiratory Syndrome (MERS) outbreak in South Korea in 2015, according to the Ministry of Trade, Industry and Energy.

“Consumer spending slows for at least two weeks following a tragedy,” Professor Suh Yong-gu of Sookmyung Women’s University said. “Those in their 20s are the most likely to be mentally affected and refrain from spending.” 

Write to Jeong-Cheol Bae at bjc@hankyung.com
Jee Abbey Lee edited this article.