Small merchants' sales and profit in the first quarter of this year both fell from the previous quarter. Seasonal factors played a large role as the year-end peak effect disappeared, but the burden on small merchants appears to be continuing as delinquent amounts on sole proprietors' loans rose again after just one quarter.

Korea Credit Data on Monday released these findings in its "Korea Credit Data Small Merchant Trends Report", which analysed the management status of small merchants nationwide in the first quarter of 2026.

The report showed average sales per business site in the first quarter stood at 42.58 million won, up 1.89 percent from a year earlier. Compared with the previous quarter, however, it fell 13.38 percent.

Average profit was 9.99 million won, down 2.63 percent from a year earlier and down 13.58 percent from the previous quarter. The profit margin was 23.46 percent, down 1.09 percentage points from a year earlier and down 0.06 percentage points from the previous quarter.

Korea Credit Data analysed that first-quarter sales fell from the previous quarter as peak-season effects such as year-end events and year-end gatherings in the fourth quarter disappeared.

By sector, sales growth was notable for cafes and the bakery-and-dessert segment. Cafe sales rose 7.2 percent from a year earlier, while bakery-and-dessert sales increased 11.4 percent. Dessert demand was seen as having an impact through the first quarter.

Loan delinquency burdens also grew again. Outstanding loans to sole proprietors in South Korea in the first quarter were tallied at 732.2 trillion won. Outstanding bank loans were 433.3 trillion won, while non-bank lenders accounted for 298.9 trillion won. Among non-bank lenders, mutual finance had the largest outstanding loan balance at 236.2 trillion won.

Delinquent loan amounts for sole proprietors were 14.6 trillion won, up 12.6 percent from the previous quarter. The figure had shown a decline for the first time since the fourth-quarter report was issued, but turned back to an increase after one quarter. The delinquency share relative to outstanding loan balances was relatively high at 5.8 percent for savings banks and 3.3 percent for mutual finance.

Ye-won Kang (강예원), head of data at Korea Credit Data, said, "The first-quarter sales decline is largely due to seasonal factors as the peak season ended." She said, "The fact that delinquent amounts turned back to an increase after just one quarter is a signal that small merchants' management burdens remain, so it needs to be watched closely along with consumer trends in the second quarter."