Report: Small stores need help versus Goliaths

The “oligopoly” in the supermarket industry is turning serious, according to a report from the Korea Federation of Small and Medium Businesses. The 245 stores of the big four chains ― Lotte Mart, Homeplus, HomeEver and E-Mart ― took 75 percent of the total large-sized supermarket sales last year, the report said.
Because of the growing number of big stores, more than 90 percent of the small- and medium-sized stores and traditional stores have experienced a drop in sales. Since 2000 at least 39,000 small- and medium-sized stores have gone out of business and 58,000 people have lost their jobs.
Suppliers to the mega stores are also having problems with them. The report claimed that more than 70 percent of those in business relations with the big stores have complained about unfair treatment from their buyers.
They argue that the big stores should pay more for their products, but do not, because of the oligopoly.
The paper argued that, although regulations do exist, more ways to protect the small store owners are needed.
“Even the World Trade Organization member countries, including France and Germany, have regulations on operating time, locations of mega stores and other business conduct.
Measures to help small- and medium-sized stores and traditional markets develop together with the big stores have to be made, promptly,” said Yu Ok-hyun, head of the management support team at the federation.
The mega stores are also concentrated in the capital region, which includes Seoul, Incheon and Gyeonggi province.
Almost 50 percent of the nation’s large chain supermarkets are concentrated in the capital region, and the goods they sell are worth 57 percent, or 13.2 trillion won ($14 billion), of total sales nationwide.
The number of super stores has increased to 342 from 307 in the last year.

By Hwang Young-jin Staff Writer [yhwang@joongang.co.kr]