Growing 'Shutdown' Fear in Retail... Temporary Closures Surge at Department Stores and Large Marts

[Asia Economy Reporter Lee Seung-jin] As new cases of COVID-19 continue to surge, temporary closures of department stores and large supermarkets have occurred one after another. In the distribution industry, concerns are growing about a repeat of the shutdown situation that happened earlier this year, with over a hundred temporary closures.

Department Stores and Large Supermarkets Temporarily Closing One After Another... The Fear of February Approaches

According to the distribution industry on the 31st, Shinsegae Department Store Gangnam Branch will resume operations today. On the 30th, an employee working in the food section on basement level 1 at Shinsegae Gangnam tested positive for COVID-19, leading to an early closure at 1 PM. Previously, on the 12th, the store also closed early after confirming a visit by a COVID-19 positive individual.

Since the 16th, temporary closures have occurred consecutively at department stores and large supermarkets. On the 20th, Emart Uijeongbu Branch closed urgently after a partner company employee tested positive for COVID-19, and on the 28th, the Changdong Branch temporarily closed. On the 27th, an employee at Lotte Department Store Guri Branch tested positive, resulting in an early closure. Following this, early closures and temporary shutdowns occurred one after another within ten days, including at Shinsegae Gangnam Branch.

As a result, fears of the shutdown that occurred earlier this year are spreading in the distribution sector. Lotte Department Store temporarily closed 19 times from February to June. Emart also temporarily closed about 30 stores during the same period. Most of these closures were concentrated in February and March, when COVID-19 cases surged, and across the entire distribution industry, temporary closures exceeded 100 cases.

The sales damage during this period was also severe. On weekdays, the average sales of department stores were around 2 to 3 billion KRW, and large supermarkets were about 300 to 500 million KRW. Even a simple calculation shows losses amounting to several hundred billion KRW, and with the fear of COVID-19 infection, foot traffic to offline stores decreased, causing the damage to snowball.

Regarding this, a distribution industry official said, "Although we have raised the level of quarantine response to the highest, cases where employees transmit the virus to family members cannot be prevented," adding, "The industry is currently in an emergency state."

The underground refrigerated center of the Seoul Complex Logistics Center in Jangji-dong, Songpa-gu, Seoul, operated by Market Kurly. (Photo by Yonhap News)

E-commerce Industry Faces Logistics and Delivery Emergency

The e-commerce industry, which is experiencing a surge in sales due to COVID-19, is also facing an emergency. Operations at logistics centers have been suspended as employees working there have consecutively tested positive for COVID-19.

On the 28th, a COVID-19 positive case was confirmed at logistics centers operated by SSG.com and Market Kurly, leading to the complete closure of the related facilities. The confirmed individual worked during the day at SSG.com's 'Neo003' located in Gimpo, Gyeonggi Province, and at night was responsible for Market Kurly's dawn delivery service, prompting the closure of all related facilities and the commencement of disinfection work.

Additionally, on the 30th, one employee at Market Kurly's Refrigerated Center 2 in Jangji-dong, Songpa-gu, Seoul, tested positive for COVID-19, leading to the closure of the center. Kurly received notification of the employee's positive test from health authorities that morning, closed the center, and completed disinfection. They are also conducting COVID-19 tests on employees who may have had contact with the confirmed case and are awaiting results.

In this situation, the e-commerce industry is concerned about the worst-case scenario of a complete halt in deliveries. Currently, even if one logistics center closes, deliveries continue without disruption by using nearby logistics centers. However, if multiple logistics centers simultaneously report positive cases and close, deliveries will inevitably become impossible.

Regarding this, an e-commerce industry official explained, "We are currently establishing a response system based on various scenarios," adding, "We are minimizing movement among employees and preventing contact so that even if a logistics center closes, it can be quickly restarted."

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