Retail and distribution industry struck hard by new coronavirus
Customers wearing masks shop at a discount store in Seoul, Tuesday. / Yonhap
By Kim Jae-heun
By Kim Jae-heun
The potentially deadly coronavirus crisis is expected to drag on for some time and affect Korea's retail and distribution industry.
There had been rumors that Chinese President Xi Jinping would visit Korea and finally lift the restrictions on Chinese tourists' travel to Seoul.
Since 2016, the Chinese government has been restricting group tours to Seoul as an act of economic retaliation following Seoul's decision to deploy an American missile defense system.
The Korea Tourism Organization predicted some 130,000 Chinese tourists would visit Korea during the Lunar New Year between Jan. 24 to 30, which is an 18.1 percent increase from the same period last year.
In fact, the growth rate of purchases made by Chinese visitors at Shinsegae Department Stores increased by 13.9 percent in November, 23 percent in December and 46.5 percent from January 1 to 16.
But the sudden outbreak of the deadly virus that originated from the Chinese city of Wuhan has raised concerns here, which could affect retailers much like the outbreak of Middle East Respiratory Syndrome (MERS) that swept the country in 2015.
Sales at local department stores and major discount stores decreased by 11.9 percent and 10.2 percent respectively due to the MERS incident in June five years ago.
In an attempt to quell customer fears in the face of the coronavirus, the two biggest department store franchises Lotte Department Store and Shinsegae Department Store have installed hand sanitizers at every door while providing masks for employees to wear.
Shinsegae Department Store, in particular, is carrying out preventative measures at all its stores to prevent the spread of the virus.
“Toilets, escalators and the gates of department stores are our controlled areas,” a Shinsegae official said. “For the handrails of escalators, we are sterilizing them every hour. We have also provided extra hand sanitizers for both customers and employees to use.”
Lotte Group's discount store Lotte Mart began checking employees' temperatures twice a day and sent those to hospital who were found to have a fever. Staff with the flu are also subject to quarantine measures and are sent home.
However, the Shinsegae official noted the difficulty in applying the prevention measures to customers.
“We cannot force customers to go through fever checks at the department stores. Carrying out the measure mainly on Chinese visitors is also a human rights issue. Unless there are guidelines from the government, we cannot force customers to cooperate with us,” a Shinsegae official said.
Despite the retail stores' efforts, people are posting messages discouraging visits to department stores as a fourth patient in Korea was diagnosed with the coronavirus.
Even a rumor spread online that the third coronavirus patient here collapsed at Shinsegae's Starfield shopping mall in Goyang, Gyeonggi Province. However, the Korea Centers for Disease Control and Prevention confirmed the patient had not visited the shopping complex.
The effect on department stores is yet to be confirmed.
A Lotte Department Store official said it has not seen a decrease in shoppers. However, an industry insider, who wished to remain anonymous, said concerns over the virus have spread, cutting customer numbers.
“Department franchise and discount store officials cannot confirm the decline in the number of both local and foreign customers at their offline shops as the new coronavirus became an issue just before the Lunar New Year,” a source said. “Even if they do have the data, they will never tell you the facts because it can affect their sales, which I believe are already starting to see a rapid reduction.”