Itaewon Club COVID-19 Cases Deal a Direct Blow to Small Business Sales

Ministry of SMEs and Startups: "Impact of COVID-19 Outbreak Directly Affects Small Business Sales"

[Asia Economy Reporter Kim Cheol-hyun] Recently, as the number of confirmed cases of the novel coronavirus infection (COVID-19) who visited clubs in Itaewon, Seoul, has increased, it has been investigated that this is negatively affecting the sales of small business owners in the area. Sales of small business owners, which had been showing an overall recovery trend since April, are faltering again due to the occurrence of confirmed cases at Itaewon clubs.

According to the 'Small Business Sales Survey' conducted weekly by the Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) since February 3, the survey result on the 15th week, April 11, showed that the sales decrease rate of small business owners in Seoul compared to before the COVID-19 outbreak was 64.0%. This is an increase of 10.2 percentage points from 53.8% the previous week. Jeju also recorded 60.0%, with the sales decrease rate rising by 4 percentage points compared to the previous week. The sales decrease rate of small business owners in Gyeonggi and Incheon also rose by 0.5 percentage points.

This is interpreted as the impact of the COVID-19 outbreak directly affecting the sales of small business owners. Although small business sales have generally been recovering since early April, the Ministry explained that immediately after the confirmed cases related to Itaewon clubs occurred in early May, sales of small business owners in Seoul, Jeju, Gyeonggi, and Incheon were negatively affected.

By industry, sales in tourism, leisure, accommodation, educational services, and restaurants were found to be decreasing, indicating that these sectors are more sensitive to the COVID-19 outbreak than others. Meanwhile, sales recovery in Gangwon (70.0 → 38.9%) and Daegu-Gyeongbuk (72.9 → 54.6%) regions over the recent four weeks was distinct.

Regarding efforts by small business owners to overcome COVID-19 (multiple responses allowed), expanding delivery sales accounted for 29.0%, strengthening marketing such as sales and events 17.5%, and expanding online sales 5.2%. After COVID-19 stabilizes, requests to the government were for expanding small business exclusive gift certificates at 93.7%, support for promotion and marketing expenses at 9.3%, and expanding joint events such as local festivals at 6.7%.

The Ministry conducts a panel survey weekly targeting about 300 small business sites and around 220 traditional markets to investigate changes in sales of small businesses and traditional markets compared to before the COVID-19 spread, to establish policies and identify field difficulties. Minister Park Young-sun emphasized, "This confirms that small business owners and self-employed are sensitively affected by COVID-19," adding, "Practicing social distancing in daily life, staying home for 3-4 days if sick, keeping an arm's length distance, and wearing masks, which the government is promoting, are ways to save small business owners and the common economy."

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