Koreans vote to scrap supermarket shutdowns in blow to small vendors
Sundays are often a day for family shopping, but supermarkets in South Korea don’t operate every second and fourth Sunday of each month.
Under the mandatory shutdown rules, which are meant to protect mom-and-pop stores from losing sales to discount store chains, supermarkets have closed twice a month for the last 10 years.
But the ability to shop every Sunday may become possible again with tens of thousands of consumers asking the presidential office to scrap the rule.
According to the presidential office, of the top 10 proposals, “Lifting the big supermarket’s mandatory shutdown rule” ranked top on Monday, hitting more than 422,000 likes from the public.
The office will select the top three proposals with the most votes and put them into effect. The vote is open until Sunday.
Lee Seong-ah, a 32-year-old white-collar employee, said: “Even if supermarket chains are closed, I almost never go to traditional markets or small markets. Instead, I order groceries online from Coupang or Market Kurly.”
The Distribution Industry Development Act mandates big supermarkets to temporarily shut down their businesses twice a month and limit operating hours from midnight to 10 am.
The law was revised to protect small local markets from retail giants with an upper hand to lure customers to frequent their supermarket chains, which happen to be more convenient and organized.
According to the Korea Chain stores Association, which is made up of Homeplus, Emart, Lotte Mart, Costco and other supermarket chains, the 10-year-old law has failed to reflect change in the retail industry.
“Research shows the mandated shutdown has little effect in boosting local markets. But with the rules, e-commerce giants have exceeded supermarket chains in sales, while snatching customers who can’t go to supermarkets on Sundays or enjoy early-morning online deliveries,” said a supermarket chain source.
The law also means online shopping malls operated by big supermarkets cannot provide early-morning deliveries during weekdays and deliveries on shutdown weekends to customers. On the other hand, e-commerce platforms are free from those rules.
According to a report by Kyobo Securities, lifting the shutdown rules would see annual sales revenue of Emart and Lotte Shopping surge to 1 trillion won ($762.8 million/27.9 billion baht) and 400 billion won, respectively.
But small vendors remain opposed to the idea of revoking the law.
“[T]he new government is trying to stop protecting small stores and play in favour of big companies,” the Korea Federation of Midsized and Small Merchants said in a statement on Thursday.
Experts say shutting down big supermarkets is not the best way to boost healthy competition in the market.
“In order to restrain e-commerce behemoths from taking over the industry, it is important to revise the law,” said Kim Dae-jong, business professor at Sejong University. “Also, if supermarket chains close business after losing the competition from online platforms, local residents might suffer from a low quality of life.”
The Korea Herald
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