Every day for the last four years, eight mom-and-pop stores have disappeared from the streets of South Korea, and six new bars have been set up.

According to data announced by the National Statistical Office (NSO) on June 21, about 11,000 small stores closed during the four years from 2001. As a result, the number of such small, family-run shops declined to 95,967 in 2005 from 107,365 in 2001. In the meantime, the number of big supermarkets and convenience stores increased by 78 and 707, respectively, during the same period.

Many experts say that competition from such large-scale retailers have continually put the squeeze on smaller businesses, forcing them to close.

The number of bakeries and tea and coffee shops decreased to 32,008 in 2005 from 42,585 in 2001. However, the number of large shops with ten or more employees rose to 409 from 249, showing a 64-percent growth. However, such a situation has happened mainly due to an increase of chain coffee shops, such as Starbucks.

The number of bars and restaurants went up 5.3 percent to 531,929 from 505,241 during the four-year period. Within this category, the total number of smaller bars, bars with dancing (including nightclubs and cabarets), and karaoke bars increased 7.3 percent to 116,864 from 108,635. Considering that the population aged 20 and over was 35.76 million as of 2005, there are 3.3 bars per every 1,000 adults in the nation.

Almost all of Korea's retailers except for department stores and large discount markets have witnessed a decrease in operating profit margins. Small self-employed businesses have suffered a major blow due to larger retailers, experts say.

Operating profit margins of department stores and large discount outlets rose to 15.6 percent and 10.7 percent, respectively, in 2005, a 6.5-percentage-point and 3.0-percentage-point increase from 9.1 percent and 7.7 percent in 2001. In contrast, the figure decreased 4.1 percentage points for supermarkets and 2.9 percentage points for mom-and-pop stores.

Traditionally family-run businesses like restaurants and bars have seen lowered operating profit margins, but still have posted a considerable amount of surplus. As of 2005, the hotel industry - largely still a family-run one in South Korea - has recorded the highest operating profit margin of 44.7 percent, followed by bars at 35.3 percent, small snack food restaurants at 35.1 percent, tea and coffee shops at 30.7 percent, and Chinese restaurants at 30.2 percent.

Yun Seok-eun, an official of the NSO, said, "Service providers have quickly become larger for the past five years. In the process, small self-employed businesses seem to be under strong pressure due to the restructuring of the market."

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