Hyundai Department Store Lowers Fees for Over 700 Small and Medium Food and Beverage Shops

3% to 5% Point Reduction in Fees for March and April Compared to Previous Rates
Approximately 2 Million Won Benefit Over Two Months with an Average of 1 Million Won per Month
50% Reduction in Management Fees for About 280 Restaurant Stores Over Two Months
Support Measures Also Prepared by Hyundai Green Food, Hyundai Livart, and Hyundai L&C

[Asia Economy Reporter Seungjin Lee] Hyundai Department Store has decided to temporarily reduce commissions for small and medium-sized food and beverage (F&B) stores struggling due to the spread of the novel coronavirus infection (COVID-19) and also to waive management fees for specialized food courts.

Following the decision on the 15th to provide 1 million KRW each as a ‘COVID-19 Overcoming Support Fund’ to about 3,000 brand managers of small and medium-sized enterprises in the fashion, accessories, and living sectors, Hyundai Department Store has additionally announced support measures for F&B stores and specialized food courts operated by small and medium-sized enterprises and individual business owners.

On the 18th, Hyundai Department Store announced that it will reduce commissions by 3 to 5 percentage points (an average of 3.9 percentage points) for two months, March and April, for deli, bakery, and other F&B stores located in the food halls of its department stores (15 branches) and Hyundai Outlets (6 branches).

The commission reduction applies to 716 out of a total of 752 F&B stores, excluding large and mid-sized enterprises, which are operated by small and medium-sized enterprises and individual business owners. For 326 F&B stores expected to incur losses in March and April, commissions will be reduced by 5 percentage points, while the remaining 390 stores not in a loss situation will have their commissions lowered by 3 percentage points.

Accordingly, each small and medium-sized F&B store will receive support of about 2 million KRW over two months, averaging 1 million KRW per month. The company plans to provide the commission reduction benefit by deducting it from the payment for supplies made to partners in the following month.

Additionally, among all stores (361) in the food courts, 279 stores operated by small and medium-sized enterprises, mid-sized enterprises, and individual business owners (excluding those operated by large enterprises) will receive a 50% reduction in management fees for two months, March and April.

Stores in the department store food courts operate under lease agreements and pay monthly management fees based on area, which include water, electricity, heating, and charges for common facility use. With the management fee reduction, these food court stores are expected to receive benefits of about 2 million KRW each in March and April, totaling approximately 4 million KRW.

A Hyundai Department Store official said, “Since many small and medium-sized F&B stores operate multiple outlets simultaneously, we judged that reducing commissions or waiving management fees is a more practical and realistic support measure than providing a fixed amount equally.” He added, “These small and medium-sized F&B stores and specialized food courts are expected to receive benefits totaling about 2.6 billion KRW over two months through this support plan.”

Meanwhile, other affiliates of Hyundai Department Store Group, excluding Hyundai Department Store itself, are also implementing various support measures targeting small and medium-sized partner companies and dealerships whose sales have declined due to the prolonged COVID-19 situation.

Hyundai Green Food will purchase food ingredients worth 750 million KRW from small and medium-sized food material suppliers whose sales have decreased due to the postponement of elementary, middle, and high school openings. Additionally, four items used in group catering?lettuce, zucchini, cucumber, and apples?will be supplied entirely from products shipped from the Daegu and Gyeongbuk regions. The purchase volume is about 40 tons.

Hyundai Livart will partially support rent for dealerships struggling with store operations due to COVID-19. With a budget of 150 million KRW, it will select dealerships with poor sales among about 300 nationwide and support rent for March and April. The support amount varies depending on the dealership’s damage scale, store size, and region, ranging from a minimum of 300,000 KRW to a maximum of 2.5 million KRW.

In addition, Hyundai L&C will provide 1 million KRW per month for three months from this month through May as rent support to interior franchise stores (Home Style Q) in the Daegu and Gyeongbuk regions, which have been designated as special disaster areas due to COVID-19.

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