Han Mugyeong "After Large Marts Closed... Stores Within 3km Radius Lost 28.5 Billion Won in Sales"

Han Mu-kyung, first-term lawmaker of the United Future Party, presiding over a meeting in the office. / Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Lee Ji-eun] It has been found that when a large supermarket closes, it does not have a positive impact on the surrounding area, but rather causes sales to decrease by 3-5%.

According to the research analysis data on "Evaluation of 10 Years of Distribution Regulation and Win-Win Measures" submitted by the Korea Distribution Association to Han Mu-kyung, a member of the People Power Party, on the 25th, after the closure of one large supermarket store, sales in the surrounding commercial area decreased by 4.82% within a radius of 0-1 km and by 2.86% within 1-2 km, respectively.

Within a radius of 2~3 km, sales slightly increased, but the growth rate decreased after the closure.

When converted into monetary terms, it was analyzed that the closure of one large supermarket store results in a sales decrease of 28.5 billion KRW in the surrounding commercial area within a 0-3 km range.

Representative Han stated, "According to regulatory policies, the closure of large supermarkets should have a positive impact on the surrounding commercial areas, but empirical analysis data show the exact opposite result," and added, "While the competition structure has shifted from offline large-scale distribution versus small and medium distribution to offline distribution versus online distribution, distribution industry policies have not been able to respond actively to these changes, so policy changes are necessary."

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