On the 10th, the Korea Chamber of Commerce and Industry discovered 24 daily regulations causing inconvenience to citizens and suggested them to the Office for Government Policy Coordination. Notably, the proposal includes a 'restriction on delivery times for large supermarkets'.
According to related industries on the 13th, the current Distribution Industry Development Act (Distribution Act) mandates two mandatory holidays per month for large supermarkets and restricts operating hours from midnight to 10 a.m. KORCHAM argues that this prohibition on online deliveries during these hours exacerbates public inconvenience.
Established in 2012, the Distribution Act was intended as a coexistence policy to revitalize traditional markets and alley markets, but it is widely regarded as ineffective. A survey by the Rural Development Administration in 2022 found that the average daily purchase amount of groceries in traditional markets (6.1 million won) was less than that of large supermarkets (6.3 million won) on mandatory holiday days.
Concerns are raised that, despite the shift of consumption from offline to online, the restriction on online operating hours for large supermarkets violates fair competition. In response, KORCHAM suggested to the government that the restriction on operating hours should be thoroughly reviewed to align with the times, considering consumer benefits and equity within the distribution industry.
A KORCHAM official noted, 'Improving the mandatory holiday regulations for large supermarkets is a task for related corporations, but it is also a regulation that affects citizens' lives.' He added, 'This suggestion was made from the perspective of alleviating the inconveniences that citizens experience in their daily lives.'
In a survey conducted by KORCHAM in 2022, where 1,000 citizens were surveyed, 68% of respondents supported the easing of regulations on large supermarket operations. There was significant inconvenience felt among groups with high demand for early morning deliveries, such as office workers, dual-income households, and single-person households.
According to the Ministry of Trade, Industry and Energy, the sales ratio of large supermarkets among all retail channels shrank from 27.8% in 2014 to about 12% last year. In contrast, the sales ratio of e-commerce, which was comparable to that of large supermarkets at the time, expanded from 28.4% in 2014 to 51% last year, widening the gap.
In the first half of this year, offline sales, including those of large supermarkets, experienced a negative growth of -0.1% for the first time in five years. Notably, while the food sector, judged to have relatively low online penetration, showed a growth rate of 24.1% compared to the previous year in June, offline sales declined by 0.2%.
The sense of crisis at large supermarkets, which account for 70% of food sales, is growing. Homeplus, which is undergoing corporate rehabilitation due to management difficulties, is looking for a new owner, but no clear acquisition intentions have been expressed so far. Lotte Mart reported a 3.3% decrease in sales in the second quarter compared to the previous year, along with an operating loss of 45.3 billion won. The decrease in sales due to declining consumer sentiment, coupled with the transfer of its grocery division that partners with Ocado, has led to a widening deficit.
Emart saw its separate sales increase by about 12% year-on-year and achieved a return to operating profit. However, when considering only Emart discount stores, excluding warehouse-style discount stores like Traders and specialized No Brand stores, sales increased by 0.5% year-on-year, and operating losses continued, leaving the situation uncertain.
Previously, some local governments switched the mandatory holidays for large supermarkets from Sundays to weekdays. However, the ruling Democratic Party, emphasizing the protection of traditional markets and the rights of supermarket workers to have rest, has maintained a stance of strengthening regulations on large supermarkets, halting the switch to weekdays. Industry insiders expect legislation will soon be pursued, as the Democratic Party included limiting the mandatory holiday for large supermarkets to public holidays as part of their '20 key livelihood tasks' during a living meeting in March.
However, there is a perspective that the mandatory holidays cannot be viewed as the main cause of the decline of large supermarkets. The significant change in consumer flow from offline to online shopping is the main reason, and the impact of mandatory holidays is considered minor.
In related matters, Lee Jin-hyup, a researcher at Hanwha Investment & Securities, pointed out, 'The impact of enforcing mandatory holidays for large supermarkets as public holidays on the operating profits of Emart and Lotte Mart is estimated to be around 10 billion to 20 billion won annually, and considering the saving of labor costs due to reduced weekend operations, the impact will be even smaller.'
Lee Jeong-hee, a professor at Chung-Ang University, stated, 'The Distribution Act has already established itself as a symbolic protective shield for small business owners and the self-employed, so it is not a matter of simply abolishing it based on its effectiveness.' She advised, 'It would be desirable to gradually introduce aspects that small business owners and the self-employed can concede, such as allowing online deliveries outside of operating hours, without compromising the intent of the regulation.'