Discount stores face forced closures

Discount stores face forced closures

Cho Ji-hoon, chairman of the Jeonju City Council, stages a protest near an E-Mart outlet in the city, North Jeolla Province, to call for regular closed days at discount stores, in this file photo from last year. The city recently revised an ordinance to have such stores close twice a month. Seoul City is to follow the move. / Korea Times Once or twice monthly shutdown to be implemented in Seoul By Kim Rahn Major discount stores in Seoul will have to close at least once or twice a month from as early as next month in line with the revision of a related law. Seoul Metropolitan Government (SMG) said Thursday that the forced closure is aimed at boosting businesses for smaller mom-and-pop stores and traditional markets, which have lost customers to the retail giants. It said that last month it ordered 25 district offices to prepare for ordinance revisions to enforce regular closed days at discount stores. Seoul is one of several cities and counties complying with the revision of the Distribution Industry Development Law, designed to protect mom-and-pop stores and traditional markets. It has drawn a backlash from discount store operators. “We ordered each district to investigate the actual conditions of large-scale operations. The Ministry of Knowledge Economy in charge of the law will announce a standard soon and the districts will then finalize revisions to their ordinances,” a city official said. According to the revised law, local authorities can order discount stores and “super supermarkets” (SSM) to shut their doors up to twice per month, and stores in violation will be fined 30 million won. According to the law, SMG cannot solely enforce the ordinance, so it is making its districts do so. “Each district will devise independent guidelines on how many times per month and which day of the week the stores will be forced to close. When to implement the closure will also differ from district to district, as each of their councils has different schedules,” the official said. The city expects some districts to start the measure as early as March. In Seoul, 64 discount stores and 267 “SSMs” are subject to the revision. SMG is reviewing whether to include Hanaro Club, a national retailer run by the National Agricultural Cooperative Federation, in the regulation. “Legally, a branch of Hanaro Club is exempt from the regulation when more than 51 percent of its sales come from the selling of agricultural and livestock products. So, the ward offices will inspect the sales of the stores in their districts and decide whether to include them or not,” the official said. He said most of the 25 districts are likely to comply. “Because the law stipulates each local authority ‘can’ and not ‘should’ order a regular closed day, it is possible for a district to disregard the revision. But we are encouraging all of them to follow it.” The move is expanding across the country. Jeonju was the first to adopt the rule Tuesday — the city’s discount outlets and SSMs will close every second and fourth Sundays. Other local authorities such as Wonju, Gangneung, Jinju, Iksan, Busan, Mokpo and Gwangju are also complying. Discount outlet operators oppose the measure — the Korea Chainstores’ Association is considering filing a petition with the Constitutional Court to review the law and related ordinances. “The forcible closure infringes on operators’ freedom to conduct business and consumers’ right to shop. It is also unfair because televised home shopping programs and Internet shopping malls operate 24 hours a day, 365 days a year,” an official of the association said.