The Only Hope for Retail... Sighs Over Complex Shopping Mall Regulations

Over Ten Bills on Strengthened Distribution Law Submitted to National Assembly
If Revised, Outlet and Complex Shopping Malls Must Close One Weekend Every Two Weeks
Distribution Industry: "Weekend Sales Are Crucial... May Postpone or Withdraw Business"

Interior view of Starfield Anseong

[Asia Economy Reporter Seungjin Lee] As consumption shifts from department stores and large supermarkets to online, the distribution industry is accelerating the opening of complex shopping malls, which are gaining attention as new leisure spaces such as suburban outlets. However, just as these malls are about to be launched after at least three years of preparation, a regulatory bill has been proposed to restrict the operation of complex shopping malls and outlets, putting the industry in a difficult situation.

New Stores Years in the Making... Regulatory Thorny Path

According to the distribution industry on the 7th, Shinsegae Group grand opened Starfield Anseong, the largest shopping theme park in southern Gyeonggi Province. The total floor area reaches 240,000㎡. Starfield Anseong is the fourth Starfield following Hanam, Goyang, and COEX, and is one of Shinsegae's core businesses. Since the site selection in 2016, it took more than four years to open Starfield Anseong. During this process, conflicts arose with residents of the neighboring Pyeongtaek area over traffic issues, and numerous public hearings were held to seek coexistence plans with small business owners in Anseong.

Despite opening after many twists and turns, concerns remain for the future. The reason is regulation. If the amendment to the Distribution Industry Development Act (Distribution Act) proposed in the National Assembly is passed, complex shopping malls like Starfield will have to close one weekend day every two weeks. This is a fatal regulation for outlets, where 90% of sales occur on weekends.

The distribution industry is currently deliberating on plans for new suburban outlets and complex shopping malls scheduled to open. If the bill passes and weekend closures are mandated for complex shopping malls, there is a possibility of withdrawing plans that have been developed over several years. An industry official explained, "Outlets rely heavily on weekend sales, so this is essentially telling us not to open new stores," adding, "If the regulation is realized, there is a possibility that planned projects will be postponed, modified, or withdrawn."

Following the opening of Hyundai Department Store Group's first domestic 'gallery-type outlet,' 'Hyundai Premium Outlet Space One,' in Dasan New Town, Namyangju City, Gyeonggi Province, on the 6th of next month, a series of openings are planned through 2024, including Lotte Outlet Uiwang in 2021, Lotte Premium Outlet Ulsan in 2022, Shinsegae Premium Outlet Gyeongsan in 2023, and Starfield Cheongna.

Offline Distribution Slump, Outlets Provide a Breather

The reason the distribution industry is accelerating the opening of suburban outlets lies in the recent changes in consumer culture. Although online purchases have surged due to the spread of contactless consumption culture amid the COVID-19 pandemic, complex shopping malls that combine leisure facilities have shown growth even during the pandemic.

Sales at six suburban outlets operated by Lotte Department Store from the 2nd to the 4th of this month increased by 58% compared to the first weekend of the same month last year (October 4?6). This growth rate is more than 50% higher than that of department stores during the same period. Hyundai Department Store Outlet also saw a 39.7% increase in sales at existing stores during the same period. Hyundai Premium Outlet Daejeon, which opened in June, reportedly achieved 130% of its target sales despite the COVID-19 situation.

An industry official said, "Consumers want to enjoy culture and leisure activities together at offline stores, so visits to suburban outlets are steadily increasing," adding, "The reason why outlets and large complex shopping malls that have recently opened or are scheduled to open are hosting large-scale facilities for family customers is for this reason."

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