"COVID-19 Devastated the Food Service Industry... 'Only About 50,000 Won Left in Hand, Letting Go of Part-Timers and Enduring'"

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[Asia Economy Reporters Lee Seon-ae and Choi Sae-hye] As 46 days have passed since the first confirmed case of the novel coronavirus infection (COVID-19), the dining industry has been utterly devastated. Many places, from restaurants run by a single person who cannot even afford labor costs, let alone rent, to those unable to receive government support loans, are on the brink of closure.

At noon on the 3rd, a restaurant in Pildong, Seoul, famous for its baekban (set meals), had tables completely empty during lunchtime. The scene was the same when revisited in the evening. The owner sighed repeatedly and said, "There was no real impact on sales even a week after the first confirmed case appeared, but after the 31st confirmed case, sales were cut in half, and now it's hard to even serve three tables a day. Our daily revenue is only 50,000 won, so recently, we had to let go of the part-time server and are just holding on."

According to the results of three surveys released by the Korea Foodservice Industry Research Institute, the number of customers at dining establishments has been steadily declining since the first confirmed case on January 20. A survey conducted over four days from February 18 to 21 targeting 600 member restaurants of the Korea Foodservice Industry Association showed a 32.7% sharp decrease in customers. In the second survey conducted from February 11 to 14, 83.0% of restaurants responded that the number of customers had decreased compared to before the first confirmed case three weeks earlier. In the first survey from February 4 to 7, 85.7% of respondents reported a decline in customers.

The institute explained, "The average customer decrease rates after confirmed cases were 29.1% in the first survey, 26.1% in the second, and 32.7% in the third," adding, "Since the announcement of the 31st confirmed case in Daegu on February 18, dining usage rates have significantly worsened."

Due to the impact of the novel coronavirus infection (COVID-19), a temporary closure notice is posted at a store in Jung-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

Mr. Lim, the owner of a chicken restaurant in Sindebang-dong, Seoul, said, "We only do dine-in and takeout without delivery, but recently weekend sales have dropped by about 30%. With nearby academies also closing, we have to give up on weekend sales for the time being," he lamented.

The situation is even more severe in the Daegu and Gyeongbuk regions. Daegu has 297 food franchise headquarters, ranking third nationwide after Seoul (1,211) and Gyeonggi (845). According to 2018 Statistics Korea data, the number of franchise employees in Daegu and Gyeongbuk is estimated at 66,000, with total franchise sales estimated at 5.3 trillion won. Mr. Park, who runs a Korean restaurant in Daegu, said, "Since the 31st confirmed case appeared, we have had no choice but to close the restaurant and cannot operate. We need to take out additional loans to escape the risk of closure, but even that is difficult, so we have no way out," he sighed.

As business deteriorates due to the COVID-19 crisis, the number of small business owners seeking emergency loans from financial institutions has surged, but many are excluded from support due to existing loans or low credit ratings. Mr. Kim, who runs a Korean restaurant in Sillim-dong, Seoul, said, "Sales have been severely impacted, so I went to apply for a small business loan, but I was told that many people want loans and I would have to wait nearly two months, which is discouraging."

Mr. Kim, who operates a cafe in Daerim-dong, Seoul, also said, "After the spread of COVID-19, I consulted several times to see if I could receive government support funds for self-employed people, but I was only told that I probably wouldn't qualify due to having many loans," adding, "Since last month, I have reduced part-time workers and have been running the store alone late into the night," showing a distressed expression.

Although the government announced emergency support measures for the dining industry in response to COVID-19, there are criticisms that the sense of benefit on the ground is low. Mr. Park, who runs a seafood restaurant in Cheonho-dong, Seoul, emphasized, "Isn't COVID-19 a natural disaster? Dining industry workers should also be able to receive employment retention subsidies, and support should be increased or fully provided," highlighting the concerns of self-employed people about the reality of closures.

Mr. Lee, who runs a bakery in Suwon, said, "The fact that the survival rate of the dining industry within five years is less than 20% means that self-employed people are already pushed to the brink," raising his voice, "I doubt we can hold on until COVID-19 ends, and closures will surge more than during the Middle East Respiratory Syndrome (MERS) crisis."

This content was produced with the assistance of AI translation services.