8 out of 10 Store Owners Suffer Losses from Lockdown

Eight out of 10 small business owners either made no profit or suffered losses in the third quarter of this year due to the coronavirus lockdown.

According to the Ministry of SMEs and Start-ups on Thursday, 46.3 percent of small business owners made no profit from July to September, while 17.2 percent posted losses of less than W2.5 million a month and 12.7 percent lost between W2.5 million and W5 million (US$1=W1,190).

Only 12.1 percent said they made a profit during that period. Hospitality businesses suffered the worst, with 40.4 percent barely breaking even and 49.4 percent losing money.

Even last year, 62 percent made profits, 8 percent broke even and 30 percent suffered losses. In 2019, 94.9 percent made profits, while only 2.4 percent broke even and 2.5 percent suffered losses. The situation is estimated to have grown worse in the fourth quarter as lockdown was re-imposed after a failed experiment in returning to normal.

In the third quarter, some 36.4 percent of small businesses made average monthly sales of less than W5 million, while 26.9 percent made between W5 million to W10 million and 13.4 percent between W10 million and W20 million, and 1.7 percent made no money at all.

The findings are based on a survey of 3,368 small businesses that borrowed money from credit guarantee foundations across Korea from July to September.