Level 4 is a problem and an opportunity for retailers

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Level 4 is a problem and an opportunity for retailers

Lotte Department Store in Yeongdeungpo branch in western Seoul closed on Sunday after one employee tested positive for Covid-19. [YONHAP]

Lotte Department Store in Yeongdeungpo branch in western Seoul closed on Sunday after one employee tested positive for Covid-19. [YONHAP]

 
Retailers are responding in their own ways to Level 4 social distancing rules, the highest on the four-level scale.
 
While e-commerce operators are stocking inventory and expending delivery areas, offline stores are reducing their operating hours and restricting services.
 
Korea reported 1,324 new daily Covid-19 cases on Sunday.
  
On Monday, the Level 4 restrictions in the greater Seoul begin, with gatherings restricted to groups of two after 6 p.m. and some entertainment establishments ordered closed.    
 
Starting Monday, SSG.com – Emart’s e-commerce site - is offering early morning delivery services to residents outside greater Seoul. The expanded service area will reach the Chungcheong provinces, in which Chungju and Cheonan, are situated, and Daejeon and Sejong.
 
SSG.com said the timing of the announcement is not related to the enforcement of the stricter regulations, but added it expects demand for early morning delivery to grow nationwide regardless of the pandemic.  
 
Market Kurly said it plans to increase inventory “because we expect demand to shop online, while refraining from outdoor shopping will be higher than usual,” said Kim Soo-jin, a spokesperson for the company.  
 
SSG.com and Market Kurly have yet to note demand growth in anticipation of Level 4 social distancing regulations. 
 
The number of orders at Market Kurly from July 6 through July 8 inched up 4 percent compared to the same period the previous week. This was despite the rapid spread of the Delta variant that led the number of Covid-19 cases in Korea to break one thousand per day over the past few days.  
 
“Last year, customers could not get their products delivered for up to five days because demand skyrocketed,” said Ahn Chang-hyeon, a spokesperson for SSG.com. “But online demand at this point is not as high as it used to be last year when Covid-19 cases suddenly jumped.”
 
It is because people have already grown used to these restrictions and are not panic buying, according to Kim Chul-min, another spokesperson for SSG.com.  
 
Offline retailers are concerned as they are forced to limit services they offer.  
 
Under Level 4, major discount marts and department stores 300 square meters (3,300 square feet)  or larger are required to close by 10 p.m.  
 
This forced Emart to cancel plans to extend operating hours until 11:30 from July 9. 
 
Homeplus and Lotte Mart are reducing operating hours by one to two hours to comply the restrictions.  
 
Operating hours of department stores are not affected as they usually close between 8 p.m. and 8:30 p.m.  
 
But the industry fears that the recent cluster infections that broke out at Hyundai Department Store at Coex in southern Seoul, along with a series of the pandemic outbreaks at other department stores, are keeping people at home.  
 
In response to the new restrictions, Shinsegae Department Store is closing all classes, like is cooking classes, held at the store until July 25, and is only allowing take-out drinks from the VIP lounge. Lotte Department Store and Hyundai Department Store are also closing the classes.  
 
“Social distancing restrictions at or above Level 3 affect people psychologically – it is like telling people to stay at home,” said Hong Seong-min, a spokesperson for Shinsegae Department Store.  
 

BY JIN MIN-JI [jin.minji@joongang.co.kr]
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