[EDITORIALS]Don’t regulate discountersA proposed bill aimed at regulating large-scale discount stores in order to protect small and medium-size business operators is being presented to the National Assembly by both governing and opposition party lawmakers. Under the main provisions, discount stores will be forced to close before 9 p.m. and only one such store will be allowed in an area with a population of 100,000 to 150,000. The lawmakers say, “It is necessary to regulate large discount stores, if we are to allow mom-and-pop stores, which are on the verge of collapse, to have some self-defense capability.”
In fact, the power of large discount stores is enormous. The Central Association of Supermarket Cooperatives claims, “When a discount store opens, some 4,000 small business owners in the neighborhood are affected.” It may be due to such social sentiment that a deregulation law was enacted recently without a clause on discount stores. And also why attempts to open new small stores in provinces have failed repeatedly.
We understand that small neighborhood stores facing difficulties need help. However, the measure that banned the operation of shuttle buses run by department stores four years ago gave us a good lesson. It was brought about by the pressure from small stores and bus companies, but failed to get the expected results. Mom-and-pop stores and bus companies enjoyed improved business briefly, but that was all. On the other hand, traffic congestion around department stores during sales promotions and weekends worsened.
The case of Japan offers us suggestions. Recently, small neighborhood stores in Japan have been winning over consumers from large discount stores and convenience stores. With the increase in the population of singles and senior citizens, convenience has become more important than price. In response to social changes, neighborhood stores tried hard by catering to customers tastes with smaller amounts of produce.
The crisis of Korea’s small businesses arises from their lack of competitiveness. In terms of price and productivity, they are no match for the discount stores. But we can’t agree with a law that runs against reality and market principles. We have to consider the interest of consumers who prefer to go to cheap and convenient stores. We must make neighborhood stores more attractive, instead of regulating discount stores that sell at cheaper prices.
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