Abolition of Mandatory Closures for Large Supermarkets Surfaces... Expectations vs. Concerns Clash

10 Excellent National Proposals at the Presidential Office Include 'Abolition of Mandatory Closure of Large Mart'
Top 3 Excellent Proposals Confirmed Through Online National Voting, Actively Reflected in State Affairs
Large Marts: "Ineffective in the Online Competition Era... Consumer Benefits Must Be Considered"
Voices Say Protecting Small Businesses Still Valid, So Not Subject to Online Voting
Financial Investment Industry Expects Operating Profit of Large Marts to Increase by 50 Billion to 200 Billion Won if Abolished

As vegetable prices soar due to early heatwaves, poor crop yields, and delayed shipments, increasing the burden of food costs for consumers, citizens are shopping at a large supermarket in Seoul on the 17th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yuri Kim] With the inclusion of 'abolishing mandatory closure of large discount stores' among the top 10 excellent national proposals announced by the Presidential Office, industry attention is focused on this issue. The financial investment sector has forecasted that if the mandatory closure of large discount stores becomes a reality, the performance of large discount stores will improve significantly.

According to the distribution industry on the 21st, the Presidential Office selected 10 proposals out of about 12,000 complaints, suggestions, and petitions received under the 'National Proposal' that were deemed feasible for policy implementation. Among them was the 'abolition of mandatory closure of large discount stores.' The Presidential Office will conduct an online national vote on the top 10 national proposals for ten days starting from this day and will finalize the top 3 excellent proposals. The top proposals will be actively reflected in state affairs.

Currently, large discount stores are required to close twice a month based on the Distribution Industry Development Act enacted in 2012. The purpose is to ensure balanced development between traditional markets and neighborhood businesses. The mandatory closure days are determined by local government ordinances, but in 90% of regions nationwide, including Seoul, the second and fourth Sundays of each month are designated as mandatory closure days.

Large discount stores are watching the situation with anticipation. A representative from a large discount store said, "The mandatory closure of large discount stores, which began in 2012 with the intention of revitalizing traditional markets, has lost its effectiveness in the current context where the competition framework between online and offline distribution channels has changed," adding, "Even though research results from academia and others have shown that the mandatory closure has a limited impact on increasing traditional market sales, it has continued for 10 years."

Another representative from a large discount store said, "Sunday sales amount to about 2.5 times the average daily sales. Despite this, stores are required to close nearly half of the Sundays each month, and even on Sundays when they are open, consumers are confused and do not visit as expected. This situation still persists," adding, "I believe this kind of irrationality should be improved even now."

However, even if discussions become serious and the decision leans toward abolition, it is expected to take time to implement due to issues such as legal amendments and communication among stakeholders. Another distribution industry representative said, "It took several years even when the mandatory closure was introduced," adding, "Although the timing and methods are unpredictable, I hope that this time, above all, the issue of consumer choice, which has been restricted so far, will be properly examined."

With the abolition of mandatory closure of large discount stores included in the top 10 national proposals, the Korea Federation of Small and Medium Business Owners and Self-Employed issued a statement on the same day, emphasizing, "Protecting neighborhood businesses is not subject to a national vote. Mandatory closure of large discount stores is the last protective shield for neighborhood businesses," and stressed that "57.2% of consumers responded that they use neighborhood businesses such as traditional markets, supermarkets, and convenience stores on mandatory closure days."

Meanwhile, NH Investment & Securities, KB Securities, and Kyobo Securities estimated the expected annual sales increase for large discount stores if the mandatory closure is abolished to be 960 billion KRW for E-Mart and 380 billion to 384 billion KRW for Lotte Mart, respectively. The annual operating profit increase is expected to be between 144 billion and 200 billion KRW for E-Mart and around 50 billion KRW for Lotte Mart.

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