"Low-Profit Tobacco Accounts for 45% of Sales"... Convenience Store Owners Demand Reconsideration of Disaster Relief Fund Criteria

On the 1st, amid the implementation of social distancing level 2.5 due to the resurgence of COVID-19, a notice restricting the operation of nighttime tasting spaces is posted at a convenience store in downtown Seoul. During the regular COVID-19 briefing that day, the Seoul Metropolitan Government announced, "Most convenience stores fall under general restaurants and snack bars, so eating inside the convenience store and at outdoor tables after 9 p.m. is prohibited." Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Seungjin Lee] The Korea Convenience Store Owners Association has requested a reconsideration of the government's criteria for the 3rd emergency disaster relief fund support, specifically regarding 'small business owners with annual sales under 400 million KRW.'

The Korea Convenience Store Owners Association (hereafter the Association) stated in a position paper on the 30th regarding the government's 3rd emergency disaster relief fund, "Despite severe damage such as turning to losses after the outbreak of the novel coronavirus infection (COVID-19), many convenience stores are excluded from this support due to the uniform criterion of under 400 million KRW in annual sales, so a review is necessary."

The Association continued, "Since tobacco sales account for about 45%, most convenience stores exceed 400 million KRW in annual sales, but net profits on average do not exceed 2 million KRW, making it one of the small-scale industries," and argued, "Tobacco has a tax rate of 80%, so it does not help from a profitability perspective."

Earlier, the government announced a plan to provide differentiated support amounts for the 3rd emergency disaster relief fund to targets including ▲small business owners with annual sales under 400 million KRW whose sales have decreased ▲businesses subject to closure orders ▲businesses subject to restrictions on gatherings.

According to the Association, the average sales of all convenience stores in 2019 were 590 million KRW, of which general sales excluding tobacco sales were about 325 million KRW (applying 45% tobacco sales). Therefore, even though income has significantly decreased due to COVID-19, many cases exceed 400 million KRW in sales because of tobacco sales, making them ineligible for government support.

The Association also pointed out the issue that 'general convenience stores' conducting only retail business are excluded from support. About 60% of convenience stores combine retail and food service businesses, thus falling under the government's restricted gathering category and qualifying for disaster relief funds. However, the remaining 'general convenience stores' are classified as general businesses and cannot receive the 2 million KRW support for restricted gathering businesses.

The Association stated, "Metropolitan local governments such as Busan, Chungnam, and Jeju have issued administrative orders restricting indoor and outdoor dining from 21:00 to 05:00 for all convenience stores, including 'general convenience stores,' effectively subjecting them to gathering restrictions," and criticized, "The government is applying unreasonable and uniform standards, damaging fairness."

Accordingly, the Association urged ▲expanding the annual sales criterion from 400 million KRW to over 1 billion KRW or excluding tobacco sales ▲applying the same standards as restricted gathering businesses in regions where convenience stores were actually restricted ▲and providing relief support for small self-employed business owners excluded from the government's plan.

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