Conflicts deepening between large retailers, small shops

By Lee Hyo-sik

Major discount stores have launched a nationwide campaign to collect signatures from consumers as part of efforts to derail government-enforced regulated closures, drawing strong protest from small mom-and-pop stores and traditional markets.

According to the Korea Chainstores' Association, Tuesday, six major discount stores and their affiliated supermarket chains began the signature-collecting campaign at their outlets across the country on Feb. 24. They aim to collect signatures from 1 million consumers who oppose the forcible closure on certain days of large retailers.

Seoul City and other municipalities across the country have and will enact a revised ordinance, in line with the newly changed Distribution Industry Development Law, which mandates discount stores to close up to twice a month. Under the new rule, stores in violation will face a 30-million-won fine.

The forced shutdown is aimed at boosting businesses for smaller mom-and-pop stores and traditional markets, which have lost customers to the retail giants over the years.

Large retailers argue that if they are forced to close their doors, particularly on Sundays, it would infringe upon consumers' right to shop, hike prices of various goods and eliminate jobs.

"Large store operators launched the signature-collecting move to publicize the ill-effects of the state-initiated closure", an official at the Korea Chainstores' Association said. "The forcible closure clearly violates store operators' freedom to conduct business and damages consumer well-being. If stores are forced to shut down on Sundays, it would deal a severe blow to them as 20 percent of total revenue is earned on Sundays".

The collective action came as Seoul City plans to enact the revised ordinance later this week. Early this month, the city government instructed 25 district offices to comply with the new ordinance. In Seoul, 64 discount stores and 267 supermarkets are subject to the rule.

Jeonju, North Jeolla Province, was the first to adopt the regulation, forcing the city's discount outlets and super supermarkets to close every second and fourth Sundays. Other local authorities such as Wonju, Gangneung, Jinju, Iksan, Busan, Mokpo and Gwangju have and will comply with the law.

Owners of grocery stores and other retail shops across the country strongly denounced the signature-collection campaign by larger retailers, claiming the compulsory closure of discount stores will not cause any harm to consumers.

"Large-scale retailers have taken advantage of loopholes in the existing laws designed to protect small shops by establishing more outlets. The signature-collecting is aimed at pressuring municipal administrations to turn the tide in their favor", said an executive of the Korea Federation of Retailer Organization.

"Regardless of what discount stores do, local administrations should force them to shut down in accordance with the law, helping small shop owners to continue to earn a livelihood".