"COVID-19 and Other Impacts" 20,000 Commercial Stores Decreased in Seoul in the First Quarter

Over 20,000 Seoul Commercial Properties Decreased in Q2 Compared to Q1
"Entertainment and Restaurants Hit Hard by Prolonged COVID-19"

[Asia Economy Reporter Kim Yuri] As the novel coronavirus infection (COVID-19) crisis enters a prolonged phase, there is a clear trend of decreasing commercial establishments in Seoul this year.

On the 7th, Real Estate 114 analyzed commercial data from the Small Enterprise and Market Service and found that the number of commercial establishments in Seoul in the second quarter of this year was 370,321. This is a decrease of 21,178 from 391,499 in the first quarter. Real Estate 114 stated, "The continued economic downturn and the impact of COVID-19 have dampened consumer sentiment, which is believed to have influenced the reduction in the number of stores."

Compared to the first quarter, the number of commercial establishments in Seoul decreased across all industries in the second quarter. In particular, the 'Food' sector saw a decline from 134,041 establishments in the first quarter to 124,001 in the second quarter, a reduction of 10,040. Of the approximately 20,000 stores that closed over three months, about half were in the food sector. As companies increased remote work due to concerns about COVID-19 infection, dining out and company dinners decreased, leading to reduced sales. Many stores could not bear fixed costs such as labor, inventory, and rent, resulting in closures. Additionally, more than 3,000 stores disappeared in retail sectors such as convenience stores and marts, as well as lifestyle service sectors including printing shops and beauty salons compared to the previous quarter.

Meanwhile, the sector with the largest proportion of store closures was the 'Tourism, Leisure, and Entertainment' sector, including PC rooms and entertainment establishments. This sector decreased by 1,260 stores, or 10.8%, from 11,714 in the first quarter to 10,454 in the second quarter. The restrictions on operating multi-use facilities and the requirement to keep visitor logs to prevent cluster infections significantly reduced the number of users.

Real Estate 114 expects the number of commercial establishments in Seoul to continue declining into the third quarter following the second quarter. Since mid-August, the resurgence of COVID-19 has led to temporary suspensions or restrictions on multi-use facilities, inevitably impacting sales. Ye Kyung-hee, Senior Researcher at Real Estate 114, said, "If the closures of self-employed businesses struggling with operational difficulties continue, various socio-economic problems such as vacancies and household debt are likely to arise, so multifaceted support measures for them are necessary."

As the COVID-19 situation prolongs, some landlords have lowered rents to ease the burden on self-employed business owners, and the Seoul Metropolitan Government is contributing to expanding positive influence through the 'Seoul-type Good Landlord Support Project.' This project supports 'good landlords' who voluntarily reduced rents after COVID-19 by providing subsidies for building maintenance and promoting commercial establishments. In addition, Seoul is implementing policies to support businesses affected by confirmed cases visiting stores and providing emergency funds to vulnerable small business owners.

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