COVID-19 Surge in Closures... Karaoke Rooms, Golf Practice Ranges, and DVD Rooms Hit Hard

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] It has been revealed that enclosed businesses such as karaoke rooms, golf practice ranges, and DVD rooms have been the hardest hit by the spread of the novel coronavirus infection (COVID-19) crisis.

According to a report on the first round of emergency disaster relief payments prepared by the Korea Development Institute (KDI) at the government's request on the 28th, the industries with the most deteriorated closure and suspension rates compared to the previous year as of the second quarter were karaoke rooms, golf courses, and video rooms. The closure and suspension rate of these industries rose by 0.72 percentage points from 1.05% in the second quarter of last year to 1.77% in the same period this year. During this period, out of about 44,000 places, 784 closed down.

Entertainment bars and nightclubs, which were subject to business suspension orders due to social distancing, were directly hit. Among 42,000 places, 614 closed, an increase of 204 compared to last year. The closure and suspension rate of the travel industry also rose by 0.1 percentage points to 1.32%. With the extension of the 2.5-level social distancing in the metropolitan area and level 2 in non-metropolitan areas until January 3 next year, the closure rate of these industries under high-intensity measures is expected to soar further in the third and fourth quarters.

On the other hand, the closure and suspension rate of pharmacies in the second quarter was 0.82%, down 1.51 percentage points from a year earlier. This is analyzed as a result of people avoiding hospitals and instead visiting pharmacies, as well as increased purchases of hygiene products such as masks and hand sanitizers.

The closure and suspension rate of optician stores also decreased by 0.67 percentage points to 0.52%. It is interpreted that the sales of related industries increased as people who received disaster relief payments increased consumption of durable goods such as furniture, clothing, and glasses rather than face-to-face service industries or restaurants. A similar phenomenon appears when looking at the credit card sales growth rate before and after the first disaster relief payment of up to 1 million won was given to all citizens. Comparing the year-on-year growth rates for the three weeks before and six weeks after the disaster relief payment, the industry with the largest change was laundromats (34.5 percentage points: -25.1% → 9.3%). Sales also increased in the order of optician stores (+34.0 percentage points), health (+31.4 percentage points), and fashion (clothing) and accessories (+28.8 percentage points). Additionally, the closure and suspension rate of convenience stores in the second quarter decreased by 0.53%, and those of beauty and restaurants also fell by 0.47 percentage points each.

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