Seoul to toughen stance on discount chains

By Na Jeong-ju

Seoul Metropolitan Government (SMG) plans to toughen regulations on retail chains affiliated with conglomerates to protect smaller supermarkets and mom-and-pop businesses.

The measure came amid concerns that large discount outlets, such as Lotte Mart and Home plus, have bypassed rules to expand their presence in the capital. City officials said some outlets operated by the retail chains have registered themselves as “shopping centers,” not retail stores, to evade regulation.

They include a Lotte Mart outlet inside the Lotte World indoor amusement park and a Home plus store in a shopping district in Mokdong. There are a total of 63 large retail outlets in the capital, but seven of them have evaded regulation in that way.

“We are pushing for a revision of laws to remove legal loopholes that have been misused by major discount stores operated by conglomerates,” a city official said.

Activist-turned-mayor Park Won-soo has vowed to strengthen measures to protect small shops from large retailers. Early this year, SMG set up an ordinance to mandate discount stores to close at least twice a month and instructed 25 district offices to levy fines on violators.

Last month, the Seoul Administrative Court ruled in favor of five discount outlets which defied the new rule, putting a brake on the city’s move to restrict operating hours of big retailers. The court, however, did not rule on whether restricting operating hours is unlawful or not, only saying that there was a procedural problem in implementing the ordinance.

The city said it would address the procedural problem so that ward offices can regulate the outlets appropriately.

In April, the Cabinet endorsed a bill to force large retailers to cut operating hours or close their shops on certain days despite protests from large retailers and some consumer groups. Aggressive expansion by large retailers in recent years has triggered a strong backlash from street market vendors and shop owners.