'Corona Direct Hit' Department Stores Embarrassed by Mandatory Closure Demands

Major Department Stores Operate Full Days Without Regular June Closures
Union States "May Demand Mandatory Weekly Closures"
Industry Takes Cautious Stance Amid Sales Decline

On the 8th at 2 p.m., the Department Store Duty-Free Sales Service Labor Union held a press conference in front of the main branch of Lotte Department Store in Jung-gu, Seoul, urging the implementation of regular store closures.

[Asia Economy Reporter Seungjin Lee] As the department store industry takes a direct hit from the novel coronavirus disease (COVID-19), the labor sector is drawing attention by calling for mandatory closures similar to those of large supermarkets, going beyond the current once-a-month regular closure of department stores.

On the afternoon of the 8th at 2 p.m., a press conference was held by the Department Store Duty-Free Sales Service Labor Union in front of the Lotte Department Store main branch in Jung-gu, Seoul, urging the implementation of regular closures for department stores. The union stated, "Department stores had weekly regular closures in the 1990s, but since the IMF crisis, they have irregularly closed once a month. Since the outbreak of COVID-19 this year, they have not even been able to close once a month," they claimed.

The three department stores?Lotte Department Store, Shinsegae Department Store, and Hyundai Department Store?decided to operate on a full-day work schedule without regular closures throughout June. Due to temporary closures caused by COVID-19, the number of business days decreased, inventory increased, and operating losses grew, leading partner companies to request this from the department stores. It is highly likely that the full-day work schedule will continue in July as well.

The union strongly criticized the department stores for trying to quietly eliminate the once-a-month regular closure by citing COVID-19 as a reason. A union official said, "Discussions are underway in the National Assembly regarding amendments to the Distribution Industry Development Act, which include mandatory closures and regulations on business hours for department stores. We may demand mandatory closures of at least once a week instead of just once a month."

The department store industry is in a difficult situation. Temporary closures continue to occur due to visits by confirmed COVID-19 cases. Sales are also on a continuous downward trend. Based on data from January to April this year, Lotte Department Store's sales dropped by 22.7% compared to the previous year. Shinsegae Department Store's sales decreased by 11.6% during the same period, and Hyundai Department Store has recorded negative sales compared to the previous year every month.

An industry insider explained, "Regardless of the department stores' regular closures, partner company employees are instructed to take two days off per week according to their company's guidelines." The insider added, "If mandatory closures, rather than regular closures, are applied to department stores and weekends?which are peak sales days?are included as closure days, the department store industry will face collapse. This is a matter involving the jobs of tens of thousands of partner company employees, so it must be approached with caution."

Meanwhile, the National Human Rights Commission of Korea recommended to the Ministry of Trade, Industry and Energy in August last year that department stores and complex shopping malls be included in the scope of mandatory closures and business hour restrictions. It is known that the National Assembly is currently discussing the passage of amendments to the Distribution Industry Development Act containing these provisions.

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