"Despite Business Closure, Rent Still Due"...Small Business Owners Struggle Amid COVID-19 Resurgence

Small Business Association Conducts Nationwide Survey of Over 3,000 Participants
"96.4% Report Negative Impact... Half Consider Closure"

The economic downturn for self-employed business owners continues as external uncertainties and rising oil prices overlap. On the 4th, a store in the underground shopping center at Gangnam Station, Seoul, hung a notice announcing its closure and operated on its last day. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Moon Hyewon] # “Since the end of February until now, we have not been able to operate the singing practice room, and even when we open, most days we cannot start business. Sales in March were only 290,000 won, and sales in April were 305,000 won. Rent is overdue by three months, but even when we put it up for rent, we have not received a single call.”

# “Due to COVID-19, we closed for three weeks. Even though we cannot operate, how are we supposed to cover the basic maintenance costs of about 7 million won, including monthly rent, management fees, association fees, and copyright fees?”

The worries of small business owners have deepened following the resurgence of the novel coronavirus infection (COVID-19).

According to the ‘Survey on the Actual Conditions of Small Business Owners after the COVID-19 Resurgence’ announced by the Korea Federation of Small and Medium Business on the 7th, 96.4% of small business owners reported a ‘negative’ (very negative + somewhat negative) impact on their business activities after the COVID-19 resurgence.

This survey was conducted over four days from the 31st of last month, targeting a total of 3,415 general small business owners nationwide (in wholesale and retail, food service, personal services, etc.) using an online questionnaire.

When estimating the monthly damage amount to business sites, ‘between 5 million won and less than 10 million won’ was the highest at 31.3%. This was followed by ‘between 1 million won and less than 5 million won’ at 24.5%, and ‘10 million won or more’ at 19.2%.

Among business operating costs after the COVID-19 resurgence, the most burdensome was ‘rent,’ accounting for 69.9%. In a survey conducted from April 2 to 8, the early stage of the COVID-19 spread, only 38.6% of respondents answered rent as the biggest burden.

Regarding the outlook for their businesses, 50.6% responded that they are ‘maintaining the business but considering closure.’

Regarding the payment of the ‘second disaster relief fund,’ 96.1% responded that it is ‘necessary’ (very necessary + somewhat necessary). As for the payment target, ‘selective payment’ was 68.5%, and ‘universal payment’ was 29.7%. Regarding the impact of the second disaster relief fund on the local economy, 85.5% responded that it would ‘improve’ (very improved + somewhat improved).

Among policies for reducing utility charges, ‘local and national tax reduction’ was the most needed at 46.1%, followed by ‘electricity fee reduction’ at 45.6%.

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