By Yoon Ja-young
Staff Reporter
Mom-and-pop shops are disappearing from neighborhoods, losing to cutthroat competition against giant retail outlets and convenience stores.
According to the National Statistical Office (NSO), huge retail outlets like E-Mart posted sales growth of 9.8 percent last year. They saw sales increase every year ― 9.9 percent in 2004, 9.1 percent in 2005 and 8.5 percent in 2006.
Last year was even better for convenience stores like GS 25, which had sales up by 11.1 percent. It had double-digit growth in both 2004 and 2005, though the growth rate slowed to 7.9 percent in 2006.
Mom-and-pop shops, meanwhile, are seeing sales drop. Small markets below 50 pyeong (165.3 square meters), excluding convenience stores, saw sales decrease of 2.9 percent. They were the only retailers to see sales fall. They witnessed sales grow by 4.7 percent in 2006, but it dropped 3.4 percent last year.
Losing the competition, these small retailers are disappearing from the market. According to the Bank of Korea, the number of these shops dropped to 585,996 in 2005, from 739,059 in 1995. Another statistic showed that an average 6.3 mom-and-pop shops closed down everyday between 2001 and 2006.
The number of convenience stores, meanwhile, surged to 8,855 from 1,557, increasing 20 percent on average every year during the last 10 years. Retail outlets also explosively surged to 316 from mere 25 a decade ago, growing 28.9 percent on average each year.
``The small shops in the neighborhood are uncompetitive compared with convenience stores or retail outlets, and seem to be going through restructuring,'' the statistical office explained. They are absorbing old customers of mom-and-pop shops.
Department stores saw sales grow by only 3.2 percent, smaller than the previous year's increase at 5.6 percent.