April 06, 2020 11:06
Mom-and-pop businesses are closing down left, right and center as the coronavirus epidemic keeps customers away.
A survey by the Korea Development Institute of 24 industry cooperatives including furniture, realtors and hospitality shows their average monthly revenues have fallen 42.8 percent since January and their average net profit 44.8 percent.
The biggest sales decline was in apparel shops (-85 percent), furniture stores (-80 percent) and jewelry shops (-70 percent).
Seoul's biggest electronics market in Yongsan took a huge hit in February and March due to the delayed opening of schools followed by a lackluster spring wedding season. Spring is usually busy for retailers there due to the rush of students buying computers or other electronics devices as well as newly-weds buying new home appliances.
Kim Young-san, the head of the market cooperative, said, "IT parts and computer products are heavily reliant on imports from China and Japan, so the situation is literally hopeless. We have no products to sell and there are no customers either."
Economic slumps in the past were followed by expectations of resumed consumption of clothes and home appliances, but the protracted epidemic has dashed any hopes of a swift recovery.
Mom-and-pop stores are having a tough time paying the rent. Some 93.3 percent of small store owners said the decline in customers was the main reason for the sharp drop in sales, while 50 percent blamed rising wages due to the minimum wage hike.
In the KDI survey, 83.9 percent said the minimum wage should either be kept frozen or slashed next year.
One owner of an indoor playground for kids in northeastern Seoul said, "I yearn for the days when all I had to worry about was the increased minimum wage. If the current situation persists, I will not only have no more staff left but my whole store will be gone."
Some 64.3 percent of store owners said they will be unable to last six more months in current circumstances.
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