Moms & Pops Take on Discount Store
Small Merchants Vs. Corporate Retailers’ Fight Takes New Twist
By Kim Hyun-cheol
Staff Reporter
After successfully thwarting the advance of small, conglomerate-owned stores sneaking into neighborhood corners, mom and pop stores are taking on bigger ones ― the retail shops that have taken away customers from traditional markets.
The Gwangju branch of the Korea Supermarkets Alliance (KOSA), the lobby of small storeowners, has requested a halt in the plans of discount chain Lotte Mart and its smaller clone Lotte Super to open new stores in the southwestern city.
This marks the first request involving action against a large retailer, the small businesses-governing body said. In the past, such requests have been made with smaller outlet stores, commonly dubbed ``super supermarkets'' (SSMs), that are run by bigger discount franchises.
Lotte Mart was preparing to launch its latest store in Gwangsan next month after three years of preparations. The company won a bid in 2006 to operate a business in a newly developed residential area, and the groundbreaking ceremony was held in early 2007 with permission from the municipal authorities.
The KOSA branch said the request represents their members' wish to compete on an equal playing field with their bigger competitors.
``Buffeted by multiplying mega-sized stores and SSM, small merchants are going out of business in the city of 1.4 million people,'' a spokesman said. Currently three department stores, 11 discount stores and 13 SSM are in operation in Gwangju, which the small merchants feel are too many as they pose a serious threat to their livelihood.
Lotte Mart, on the other hand, downplayed the small merchants' collective action, saying the company is doing everything legally with regards to the construction of its store.
``We are not bullying smaller merchants. The construction site was allocated for a discount outlet from the beginning,'' a Lotte Mart spokesman said. ``And it doesn't erode any commercial rights of local merchants because the district has no shopping facility within it.''
Lotte Mart said there will be no change in its plans to launch a hypermarket.
However, the smaller merchants' fight against Lotte is more complicated than their bids to stop SSM.
In this case, the Small and Medium Business Administration (SMBA) has the final say over whether the new Lotte Mart store's area can be bigger than 3,000 square meters.
But it comes at a time when the public opinion is blowing in the favor of small merchants.
Moves against SSM are spreading to different regions of the country. In several major cities, including Incheon, Daejeon, Daegu and Ulsan, groups of local operators of grocery and other shops are protesting.
On Wednesday, smaller storeowners staged a sit-in protest at Seoul's Songpa to protests the scheduled launch of an E-Mart Everyday SSM store by Shinsegae, the nation's largest retailer.
Faced with resistance from local and provincial business operators, the opening of some SSM stores has been put on hold.
Conversely, in Changwon, South Gyeongsang Province, Lotte Mart gained permission for construction of a store, Tuesday, but only after a nine-year legal dispute with the city government.
Masan, Changwon's neighboring city, also decided last month to revise an ordinance that would restrict the size of retail stores in residential areas, to protect traditional and smaller markets, city officials said.