The battle with SSM

By Ted Hong

The small store located in my apartment runs its operation till midnight because the mega-super market just started operations right next to it a few days ago. Every day and night, the newly-opened big store has been crowded with a lot of customers shopping around to get a variety of commodities at much lower prices.

A small old mom-and-pop bakery store in my neighborhood, which always reminds me of childhood memories of frequenting mom-and-pop stores to buy sweet candies and cookies, has faced the same situation ― it is not easy to close its operation at night because of the sudden appearance of a franchise bakery backed up by a large food conglomerate across the street. This is a very prevalent picture we can easily observe in the street as we walk through neighborhoods these days.

According to a survey last year, 79 percent of retail businesses suffered much after super supermarkets, dubbed ``SSMs,” appeared in their neighborhoods. Their daily customer visits decreased by 37 percent and sales dropped by about 34 percent. At this rate, it is only a matter of time before most traditional small stores go bankrupt and disappear.

As you know, the rapid business growth of those large retailers has come at the price of mom-and-pop stores that have a limited selection of products compared with their larger competitors. Moneywise, a careful look at the situation makes us easily find that a lot of the money made goes into the hands of the large corporations that run the mega stores and franchise bakeries. Many people who run small shops have been plagued by deep financial straits because of enlarged foray into their neighborhoods by big chain stores and franchise shops.

Under these circumstances, the old saying, ``If you work really hard, you can surely succeed somewhere down the road” is no longer a convincing axiom for the people, who feel the commercial power of the big mega shops. In recent years, the aggressive expansion of neighborhood SSMs run by such big-name businesses as Shinsegae, Lotte and Samsung Tesco has triggered strong protests from local traditional markets and mom-and-pop stores we can find in every nook and cranny, which has also become a hot potato issue in our society.

Sadly, while the government has kept delaying the promulgation of appropriate regulations to actively control the SSMs’ indiscriminate attack on small shop owners, the number of SSMs has increased at a staggering rate; more than 700 stores nationwide compared with 292 four years ago, according to statistics. The efforts made so far to take the proper regulation on this issue from the government as well as the ruling party and opposition parties may be a positive sign but it is disheartening that they have yet to lead to a law, which can protect small neighborhood stores from the power of super supermarkets, and allow them to coexist.

The Lee Myung-bak administration has adopted ``fair society” as one of its core administrative principles. I think that a fair society should not mistreat business entities depending on their sizes and sales volumes, and should be built on the basis of fair competition.

Some people may argue that it is not desirable for the government to aggressively step in and control free competition in the market, but it is a very unbalanced game between small business owners and large business operations run by conglomerates.

There are many pros and cons surrounding this issue with no clear-cut and tangible solution. As far as I am concerned, the government and political parties should mediate this fight more proactively than before, and swiftly adopt appropriate and reasonable regulations.

Bureaucrats and politicians alike need to take a much broader approach to solve this complicated problem to help realize simple, plain dreams of numerous self-employed retailers ― survival. Giant, family-controlled conglomerates for their part must stop and think whether they really have to crowd out numerous mom-and-dad stores from the neighborhoods for their own prosperity.

It is time to take an effective action instead of being mired in endless discussion and offering hollow rhetoric on this issue. For giant conglomerates, it may be the matter of revenue, but at stake for countless small retailers is their very survival.

The writer has worked as a senior supply chain manager for Adidas Korea, one of the multinational companies 100 percent owned by Adidas Group in Germany. He can be reached at Calista21@naver.com.