KCCI: Shutting supermarkets on Sundays hasn't helped anyone

The controversial regulation that for the last eight years has forced large discount stores to close on some Sundays has failed in its goal to significantly boost the sales of traditional markets, according to the Korea Chamber of Commerce and Industry (KCCI) on Wednesday.

The government’s push to require large supermarkets like Lotte Mart and Emart to be closed twice a month on Sundays has only eroded the sales of those retail chains, without actually benefiting any other stores, according to KCCI. The policy was introduced in 2012.

The market share of small-sized retailers, ranging from mom-and-pop stores to open-air traditional markets, actually fell by 10.7 percent to 36.3 percent in 2019 compared to 2012, according to a report from the business lobbying group that compiled the data from Statistics Korea.

In terms of sales, the small shops managed to post an increase of 28 percent between 2012 and 2019, but the gain is lower than the average growth of other retailers — including department stores, supermarkets and duty-free shops — at 43.3 percent.

Over the same period, large supermarkets have seen sales drop.

Annual sales slumped 14 percent to 32.4 trillion won ($26.9 billion) last year compared to 2012, the only sector that shows negative growth among seven different categories.

They also saw a 40 percent decline in market share during the period.

The lobby group noted that the closing of discount supermarkets doesn’t necessarily translate into increased visits to traditional markets at a time when consumers can simply tap a few buttons on their mobile phones to get grocery items delivered straight to their doorsteps.

But despite skepticism and statistics, the National Assembly passed a bill earlier this month to extend the Sunday trading law for another five years.

“Retail policies should be formed in a way that benefits consumers,” said Lim Young-kyun, a business administration professor at Kwangwoon University, during a forum hosted by the KCCI on Wednesday. “But they were preoccupied with protecting traditional markets and small merchants."

Ahn Seung-ho, a professor at the business administration department at Soongsil University, echoed Lim’s view.

“The current regulation came into force without clear objectives and quantitative goals,” the professor said during the forum. “And the efficacy of the policy was not statistically confirmed.”

But there are still calls for the law to stay in place.

“Since the competitiveness of old markets still remains weak, the regulation needs to stay,” said Noh Hwa-bong, a researcher at the Small Enterprise and Market Service, an agency tasked with promoting small, independent merchants.

The professors, on the other hands, countered the argument, saying that the policy should be reformed to improve the competitiveness of the markets instead of pressuring large counterparts that face their own challenges in the wake of the coronavirus pandemic.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]