2023-12-24 18:00:00
‘Forced closure on Sundays’ distribution law once more. It’s already the 4th Christmas without a chopping mart… Citizens who came to buy gifts and food were in vain as they might not use the 158 major supermarkets in Seoul. “Both supermarkets and consumers are harmed by old regulations.”
On the 24th, a notice was posted at the entrance of Kim’s Club, a large supermarket located in Seocho-gu, Seoul, announcing the closure. Large supermarkets in Seoul were closed on this day under mandatory business closure regulations twice a month, and consumers who visited the supermarkets to buy Christmas gifts had to turn away. Reporter Lee Hoon-gu ufo@donga.com
#One. Mr. Kim (27), an office worker living in Yeongdeungpo-gu, Seoul, headed to a large supermarket near his house to prepare for a Christmas party on the 24th, but had to turn around following seeing a notice informing him of a mandatory holiday. The cost of eating out was rising, so he tried to buy groceries so he might have a small dinner with friends at home, but he didn’t expect that Christmas Eve and a large supermarket holiday would coincide coincidentally. He urgently ordered a meal kit for early morning delivery from an online platform. He said, “I thought it was natural to run (a supermarket) since Christmas is a big time.”
#2. Mr. Kim (42), who lives in Gwangmyeong-si, Gyeonggi-do, went to a local supermarket on the 24th to buy toys as Christmas gifts for his children attending kindergarten and daycare, but wasted nothing. The kids enjoyed looking at the toys in the store, but it was closed that day. In the end, he drove to the IKEA Gwangmyeong branch and bought a toy. Mr. Kim said, “Maybe because all the large supermarkets in Gwangmyeong were closed, there were a lot of people at IKEA,” and “It’s strange because the business closure regulations are different.”
As most large supermarkets were closed on the 24th, Christmas Eve, the Distribution Industry Development Act, which enforced mandatory business closures, was brought to the fore once more. This is the fourth time since the law was enacted in 2012 that mandatory business closures have occurred on December 24th or 25th during the Christmas season. There is growing criticism that outdated regulations that do not reflect the shift in consumption channels to online channels are increasing consumer inconvenience.
● Already the fourth time… ‘Christmas without supermarkets’
According to the distribution industry on the 24th, regarding 70 large supermarkets in Seoul were closed that day, and online delivery was also suspended. This is the fourth time that large supermarkets will be closed during the Christmas season, following 2016, 2017, and 2022. On this day, a total of 158 large corporate supermarkets (SSM) in Seoul, including E-Mart No Brand, E-Mart Everyday, and GS The Fresh, were also closed due to mandatory business closure regulations. Including these SSMs, a total of 228 large supermarkets and SSMs in Seoul were unable to operate.
This is because most local governments designated the second and fourth Sundays of each month as closed days in accordance with the Distribution Industry Development Act, which mandated two closed days each month. Online delivery outside of business hours is also prohibited. This law requires that business days be determined according to the ordinances of each local government. Each autonomous district in Seoul designated Sunday as a business day, and other local governments followed suit.
Large supermarkets that missed the ‘Christmas period’ are only swallowing their regrets. A large supermarket compared sales from December 23rd to 24th of last year with the average daily sales in December, and found that Korean beef was twice as much, raw fish was 1.5 times more, and wine and toys were each regarding three times more. An official at a large supermarket said, “Christmas Eve is a time when there are three times more people than weekdays, so if we don’t do business, it will lead to losses.”
● Consumer discomfort due to ‘reverse discrimination’ in supermarkets
Experts emphasize that regulations that do not match the reality of the rapid increase in online consumption are squeezing the distribution industry. In 2012, when the Distribution Industry Development Act was enacted, large supermarkets were known as distribution dinosaurs, but their status fell due to the growth of e-commerce. According to the National Statistical Office, sales at large supermarkets shrank from 39.1 trillion won in 2013 to 34.7739 trillion won last year. During the same period, online sales surged from KRW 38.4978 trillion to KRW 209.879 trillion. The purpose of the regulation, which was to revitalize traditional markets, has not been achieved. According to the Small Business Market Promotion Agency, the number of traditional markets nationwide decreased from 1,502 in 2013 to 1,408 in 2021.
Rather, it is pointed out that large supermarkets are experiencing reverse discrimination as consumers turn to online platforms, IKEA, Daiso, and grocery stores that are outside the regulatory scope. According to a survey conducted by the Korea Chamber of Commerce and Industry in April of this year on 108 experts from the Korea Distribution Association and other organizations, 70.4% of the respondents responded that regulations on large supermarkets are detrimental to large supermarkets and traditional markets.
Due to criticism that the effectiveness of regulations is low, mandatory non-working days are being changed in some local governments. Seocho-gu, Seoul, is the first among Seoul’s 25 autonomous districts to change the mandatory closing day for large supermarkets from Sunday to Wednesday from January next year. Daegu City and Cheongju City in North Chungcheong Province also moved their mandatory non-working days. Lee Eun-hee, a professor of consumer studies at Inha University, said, “Rather than uniformly suppressing large supermarkets, the purpose of developing the distribution industry can be achieved by reviving the underperforming areas.”
Reporter Jeong Seo-young cero@donga.com
1703450347
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