40% of Store Owners Consider Closing

Four out of 10 store and restaurant owners think they may have to close down as overhead costs pile up due to the never-ending lockdown.

The Korea Economic Research Institute surveyed 500 owners of mom-and-pop businesses and found that 39.4 percent are considering closing down.

They cited declining income as the main reason, followed by fixed costs burdens and difficulties repaying their debt.

If the present lockdown continues, one-third said they will not last another three months, another one-third three to six months and the rest between six months to a year.

Even those who are not thinking of closing down complain about plummeting earnings. In fact, 90 percent said their average monthly earnings declined, compared to the first half of this year as lockdown was tightened again. The average decline in monthly earnings was 26.4 percent.

But fewer businesses took out new loans to stay afloat, with 60.4 percent of respondents saying the amount of money they borrowed decreased, compared to January of 2020, just before the coronavirus pandemic began. Many worry about rising interest rates and new caps on the amount they can borrow.

Has government aid helped? Some 28.4 percent want more help covering their operating losses, while others are asking for help with paying the rent or rollovers on their debts.

Choo Kyung-ho at KERI said, "Small-business owners can no longer sustain themselves on loans. The government must speed up vaccination and end lockdown to ease their difficulties."