Major discounters agree to impose self-restraint

Korea's three major discount chains agreed Thursday to a set of self-imposed restraints designed to help protect traditional market places and small retailers.

Under the agreement, the three discount chains -- Lotte Mart, E-Mart and Homeplus -- said they will refrain from opening any new major outlet store in small cities with a population of less than 300,000 until 2015, the Ministry of Knowledge Economy said.

The agreement was reached at a special conference arranged by the ministry and chaired by its minister Hong Suk-woo at a Seoul hotel.

The agreement also prohibits the discounters from opening up new super-super markets (SSM) within cities and towns with less than 100,000 people until 2015.

Such moves are expected to somewhat relieve the growing tension between the large company-owned discount outlets and the country's small shop owners, who have long claimed their business worsens with each additional store opened by one of the three major retailers.

More conflicts are still expected in the near future as the measures agreed to Thursday are only voluntary steps and do not include scrapping any existing plans for new stores.

For instance, Homeplus recently reaffirmed its plans to open two new outlet stores in Seoul's Hapjeong-dong and Namhyeon-dong.

An official from the Korea Merchants' Association earlier said small shop owners and merchants from the two areas had no intention of giving up their efforts to prevent the outlet chain giant from building new stores in their towns. (Yonhap)