Under shadow of ‘superstores,’ mom and pop suffer

Posted on : 2007-02-26 14:35 KST Modified on : 2019-10-19 20:29 KST
But laws to protect small businesses would violate trade regulations, gov’t says

Less than ten years after South Korea opened its retail market to foreign competition in 1996, nearly 140,000 traditional marketplaces and mom-and-pop stores have closed, while the number of large discount ‘superstores’ has increased tenfold.

According to a parliamentary report on February 25, the number of small and medium-sized retail stores excluding convenience stores, fell by 139,897 between 1996 and 2004 to 611,741 in 2004. However, the number of superstores jumped from 28 to 276 during the same period.

In anther report by the Korea Federation of Small and Medium Business [sic], the number of small and medium-sized retail stores decreased by about 39,000 between 2000 and 2004 and the number of related employees fell by some 58,000 during the same period. In addition, sales figures seen by traditional markets declined by 2.7 trillion won between 2004 and 2005 to 32.7 trillion won.

Last year, several lawmakers, including the ruling Uri Party’s Lee Sang-min and the minor opposition Democratic Labor Party’s Shim Sang-jeong, submitted bills aiming to narrow the competition gap between traditional marketplaces and so-called hypermarkets. But the bills are delayed at the National Assembly, as the Ministry of Finance and Economy and the Ministry of Commerce, Industry and Energy both voiced their opposition.

Regarding the proposed legislation, the commerce ministry said that if the government regulates hypermarkets to protect traditional marketplaces, it would violate the regulations stipulated by the World Trade Organization.

In response, Shim of the Democratic Labor Party said a fair regulation with no discrimination between domestic and foreign companies would not violate WTO regulations. Shim also accused the government of ignoring the economic needs of the low-income sector.


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