Tears of Small Business Owners: "Drip by Drip, K-Quarantine Failure Will Kill Everyone... Shutdown Fear is Overwhelming" (Comprehensive)

COVID-19 New Cases Exceed 1,000... Considering Raising to Level 3
Self-Employed: "Half-Hearted Social Distancing Only Increases Damage to Small Businesses"
Fears of Level 3 Shutdown Lead to Calls for Business Suspension... Wave of Closures

Amid strengthened quarantine measures in the metropolitan area to curb the spread of the third wave of the novel coronavirus infection, a view of shops on Myeongdong Street, Jung-gu, Seoul. Photo by Jin-Hyung Kang aymsdream@

[Asia Economy Reporter Lee Seon-ae] "If we keep implementing social distancing regulations bit by bit, only self-employed business owners will suffer. It is better to escalate the measures and resolve this situation quickly, as that is ultimately the way to save self-employment."

At around 8 p.m. on the 13th, Choi, the owner of a restaurant in Jongno-gu, Seoul, who was closing up the hall (store) business, complained in a voice full of frustration, saying, "K-quarantine has failed due to piecemeal social distancing, and the damage falls entirely on the self-employed." He emphasized, "These days, when people running restaurants gather, they actually blame that if stronger measures had been taken early on, the situation wouldn't have gotten this bad, and some even say it would be better to escalate the measures and quickly control the situation rather than continuing like this."

"Let's escalate and control quickly" vs "Level 3 means stopping livelihoods"

As of midnight on this day, the daily new confirmed cases of COVID-19 surpassed 1,000 for the first time, sparking serious discussions about raising social distancing to Level 3. Self-employed business owners, who have inevitably suffered losses due to business restrictions under social distancing, show a despondent appearance but call for the escalation to Level 3.

At Level 3, gatherings and events of 10 or more people are prohibited, and all multi-use facilities except essential ones like medical institutions must cease operations. For restaurants, only takeout and delivery are allowed after 9 p.m., and the number of customers allowed inside is limited to one person per 8㎡ (about 2.4 pyeong). This means only one customer can be served in a space just over 2 pyeong. Kim, who runs a restaurant in Gwanghwamun, tearfully said, "I have actually given up on dinner service and have been holding on with lunch service, but if it becomes Level 3, our store can only accommodate about 10 people, which is practically unable to serve customers." Nevertheless, he added, "If we escalate to Level 3 and everyone makes efforts for quarantine, I think we can return to the pre-COVID-19 period quickly," and cautiously said, "I think temporarily closing and waiting is the best option for now."

Voices like Kim's are pouring out here and there. In an online self-employed community with 600,000 members, posts calling for Level 3 escalation are quite noticeable. One self-employed person said, "The damage to self-employed people due to the government's social distancing regulations has snowballed, yet the situation is like this," and added, "I hope we escalate quickly, even if it is painful and difficult at first, to bring this to an end." Another self-employed person pointed out, "Because the measures have been repeatedly loosened and tightened, the confirmed cases have eventually exceeded 1,000," and mentioned, "Escalation could be a solution."

Cafes, as with Level 2.5, are only allowed takeout and delivery, so nothing changes. However, they are expected to inevitably be affected by the overall decrease in consumption if Level 3 is implemented. The Bank of Korea predicted that private consumption would decrease by 16.6% if social distancing is raised to Level 3. Kim, who runs a cafe in Seodaemun-gu, said, "After Level 2.5, the number of customers taking out orders is less than 10 per day on average," and added, "If it becomes Level 3, the atmosphere will cause this number to decrease even more, but I think we need to endure the pain of Level 3 escalation to get out of this quickly."

Choi, a cafe owner in Yeongdeungpo-gu, also said, "Most of the customers visiting the store were nearby office workers, but sales have dropped by about 70% due to telecommuting," and raised his voice, "If the government had raised the level early and enforced strong social distancing, self-employed people might not have had to face restrictions now. I feel regretful, but now we need strong social distancing measures that can properly block the spread."

However, many also express fear of the Level 3 scare. Lee, who runs a restaurant in Mapo-gu, said, "After the Level 2.5 escalation, I only had one or two tables on average in the evening, so I am actually running at a loss," and lamented, "If it becomes Level 3, it is obvious that business will stop completely. I have taken out many loans, so I cannot close the business, and I feel helpless." He added, "Some neighboring restaurants say it is better to escalate quickly and control the situation because it is hard, but I don't know," and said, "I feel so hopeless that I can't think of anything."

Kim, a restaurant owner in Eunpyeong-gu, also emphasized, "Level 3 is literally a measure that stops the livelihoods of self-employed and small business owners," and stressed, "At this stage, everyone must do their best and practice quarantine to prevent the collapse of self-employment caused by Level 3 measures."

Sales Decline and Business Closures Surge

The pain of self-employed business owners is already sky-high.

First, the food service industry is experiencing a significant decline in sales. According to an analysis by the Korea Foodservice Industry Research Institute of the Korea Foodservice Association based on statistics from the first to third quarters of this year, the Shinhan Card payment amount for the food service industry (restaurants and pubs) from January to September was 71.779 trillion won, a decrease of 7.9655 trillion won (10.0%) compared to the previous year. According to a recent 'COVID-19 Foodservice Industry Impact Survey,' 90.5% of businesses reported a decrease in sales in the first quarter and 89.0% in the third quarter for dine-in services.

Accordingly, negative growth this year is inevitable, and the market size is expected to shrink by more than 15 trillion won. Based on 2018 data, the annual sales scale of the domestic food service industry was about 138 trillion won, increasing by about 7% annually from 69 trillion won in 2009. It is estimated to have reached about 150 trillion won in 2019. Considering the decrease rate in credit card payments for the food service sector, the industry expects at least a 10% negative growth, resulting in a reduction of more than 15 trillion won.

Business closures are also pouring out across the self-employed sector. Since December, the number of listings for businesses given up by self-employed owners has reached an all-time high. The number of store listings registered daily in 'Apeunikka Sajangida,' the largest self-employed community on Naver, averages 55 per day, and in December, it has exceeded 770 per day, marking the worst situation.

According to the KB Financial Group Management Research Institute's report 'COVID-19 and the Bright and Dark Sides of Self-Employment,' from January to July this year, the number of closures exceeded openings in sectors such as PC rooms, billiard halls, golf practice ranges, karaoke rooms, barbershops, bathhouses, and entertainment bars. The number of closures was 3 to 4 times higher than openings. For example, PC rooms had 1,722 openings but 2,746 closures. Billiard halls and golf practice ranges had 468 and 181 openings, respectively, but 1,415 and 675 closures, about three times more. Karaoke rooms had 288 openings but 1,118 closures, nearly four times, and entertainment bars had 114 openings but 512 closures, nearly five times.

Kim Dong-woo, a researcher at KB Financial Group Management Research Institute, predicted, "With the third wave of COVID-19 emerging since November, the number of closures in sectors already hit by COVID-19 is expected to increase further."

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