During the 3rd Wave of COVID-19, Nighttime Sales in the Food Service Industry Halved to 55%...Nationwide Disaster Relief Fund Shows 'May Effect'

Seo Young-kyo and Lee Dong-joo Request Korea Credit Data to Analyze COVID-19 Impact
Sales Declined Nov-Dec Last Year, Exceeding 1st and 2nd Waves
May, When Nationwide Disaster Relief Fund Was Distributed, Sales Recovered to Previous Year Level... Recovery After 2nd Wave Lagged Behind

[Asia Economy Reporter Oh Joo-yeon] During the third wave of the COVID-19 pandemic last November to December, sales in service industries designated as high-priority management facilities?such as entertainment venues, karaoke rooms, restaurants, and cafes?were found to have halved compared to the same period in 2019. In particular, with social distancing raised to level 2 and operating restrictions imposed after 9 p.m., nighttime sales in the dining industry dropped to about 55% of the previous year's level. In this regard, it was investigated that the nationwide disaster relief fund distributed in April last year was effective in sales recovery, leading to calls for additional payment of a second nationwide disaster relief fund alongside loss compensation to support small business owners.

According to the "COVID-19 Damage Analysis through 2020 Small Business Sales Big Data" commissioned by Democratic Party lawmakers Seo Young-kyo and Lee Dong-joo to Korea Credit Data on the 24th, the dining industry, representative of small business sectors last year, decreased by 18.7% compared to 2019. The information and communication industry and service industry also declined by 13.6% and 6.5%, respectively.

On the 23rd, when special quarantine measures banning all private gatherings of five or more people were implemented in the metropolitan area, a food court in a shopping mall in Seoul showed a quiet scene. From the 24th, the ban on gatherings of five or more people will be extended to restaurants nationwide, and cancellations or restraint of private gatherings will be strongly recommended. Photo by Kim Hyun-min kimhyun81@

Especially during the third wave of COVID-19 last November to December, dining industry sales fell by 35.1% compared to the same period in 2019, a much larger decrease than in information and communication (-15.4%), finance and insurance (-14.4%), and service industries (-13.8%).

By detailed sector, buffets (-46.0%), sandwiches and salads (-34.3%), and family restaurants (-28.9%) saw significant drops, while pubs (-28.9%) and cafes (-21.5%) also experienced double-digit sales decreases compared to the previous year.

Looking at the monthly sales trends of four high-risk sectors?dining, pubs, indoor sports services, and karaoke/PC rooms?sales sharply declined when the COVID-19 pandemic occurred, with only slight recovery afterward. After the nationwide disaster relief fund was distributed in May, sales in these four high-risk sectors recovered to the previous year's level, but following the second wave in August, the recovery slowed, and sales plummeted in December.

In particular, sales in the high-priority management facility service industry during November to December last year decreased by 55.6% compared to the same period the previous year, falling 40.8 percentage points more than the average sales decline in the entire service industry (-13.8%). For general management facilities such as PC rooms, funeral homes, academies, cinemas, and indoor sports facilities, the sales decline was 26.5%, 12.7 percentage points greater than the overall service industry.

The Democratic Party plans to disclose the scale of damage by industry at the loss compensation law legislative hearing scheduled for the 25th.

Lawmaker Lee Dong-joo said, "Based on big data, the total estimated business loss of small business owners last year compared to 2019 is about 21 trillion won." He added, "About 14 trillion won has been paid through the Small Business New Hope Fund and the Support Fund, and the resources needed for loss compensation, including retroactive application, are estimated to be around 7 to 8 trillion won." Lee emphasized, "If opinions on resources are shared at tomorrow's legislative hearing and discussions are held with the government, opposition parties, citizens, and small business owners, the loss compensation law can be prepared promptly."

Lawmaker Seo Young-kyo expressed that, in addition to loss compensation, additional nationwide disaster relief funds should be provided to present more definite measures for small business sales recovery.

Seo said, "I believe that combining selective support funds with disaster relief funds can create a more certain sales recovery."

Seo also emphasized the importance of focusing on sales recovery in May after the nationwide disaster relief fund was distributed, stating, "Selective support funds may allow businesses to breathe, but to revive small business owners, a catalyst is necessary." Regarding the timing of the payment, she mentioned, "Around September, before achieving COVID-19 herd immunity."

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