[Public Voices] Regulations on Large Discount Stores: Time to Reach a Conclusion

Discussion Fizzles Out Due to Hasty Preparation
Government Must Take the Lead and Facilitate Negotiations

Professor Jeong Yeonseung, Department of Business Administration, Dankook University.

Jeong Yeonseung (Chairman of the Policy Committee of the Korean Academic Society of Business Administration · Professor, Department of Business Administration, Dankook University)

Since the new government took office, the President and the Prime Minister have declared regulatory reform and have been driving regulatory measures day after day. The basic intention to eliminate outdated regulations and regulations that hinder economic growth is worthy of positive evaluation. However, there is concern that due to the low approval ratings at the early stage of the current government, the prepared reform agenda may not be properly implemented. A representative example of this is correcting the regulations on large discount stores.

The discussion on "abolishing the mandatory holiday regulation for large discount stores," triggered by the national proposal vote last June, was canceled due to hasty preparation, and although it was ambitiously raised as the first agenda item of the Regulatory Tribunal, the discussion was postponed after the first meeting. Public opinion in favor of abolishing the large discount store regulation is high, and the industry, which has been waiting for over 10 years, is seeing the discussion fizzle out again.

In fact, the government selected the regulation on large discount store operations as the first agenda item of the Regulatory Tribunal, considering it the most likely to succeed, but due to strong opposition from related organizations such as small business owners, the discussion stopped without even starting in earnest. The small business side raised issues with the unilateral process without overall opinion gathering.

No matter how rational a policy is, there are always opposing interest groups, and the new government likely anticipated this, but it is regrettable if discussions are canceled like this. This is especially so because it is a matter of properly correcting regulations that have been ideologically driven without basic review of the impact of large discount store regulations and public inconvenience.

However, what the large discount store side raised at the Regulatory Tribunal meeting was not the abolition of the mandatory closing days but improvements, and the three regulatory improvement proposals were very reasonable. From the perspective of fair competition, they proposed improving the online business regulations imposed on offline businesses, excluding stores where individual investment exceeds 51% among corporate supermarkets (SSMs) from regulation, and maintaining the total regulation volume while expanding the authority of local government heads to freely set closing days by region.

These claims are completely different from abolishing the large discount store regulations. Since it is difficult to reverse the overall regulation, their argument seems to be to make fine adjustments only to parts that are outdated, cause significant consumer inconvenience, or are misapplied legally.

It is not too late even now. Whether it is the Office for Government Policy Coordination or the Ministry of Trade, Industry and Energy, the key ministries must take the lead and facilitate continuous consultations among stakeholders. The distribution industry has already been reorganized into online versus offline, and consumers also support abolishing the large discount store regulations. The regulations so far have also caused side effects such as the rapid growth of food material marts.

Now, framing the issue as a confrontation between large discount stores and traditional markets is an outdated idea. Traditional markets and large discount stores have no chance of winning if they compete; they must cooperate to have a future. Rather than ineffective unilateral regulations on large discount stores, policies should be flexibly improved for consumer benefits and coexistence with traditional markets.

Instead of unilateral methods like the Regulatory Tribunal, a coexistence meeting table where both sides understand and can compromise should be promptly activated. In particular, the government should simultaneously present package support measures for small and medium distribution. If this process is harmoniously promoted, the new government's attempt to reform large discount store operation regulations can surely achieve clear results within this year. We look forward to the government's resolute decision and achievements.

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