Korea, big-box retailers seek to ease rule on store operating hours

Big-box retailers are required by law to close stores for two days each month on Sundays [Photo by Yonhap]

The Korean government is seeking to allow big-box retailers, such as E-mart Inc. and Homeplus Co., to make early morning deliveries on days when they are closed.

The Office for Government Policy Coordination on Wednesday signed an agreement with the Korea Merchant Association, Korea Supermarkets Alliance, Korea Chainstores Association, Ministry of Trade, Industry and Energy and Ministry of SMEs and Startups to collaborate on seeking mutual growth of big and small retailers. Under the agreement, the government and the retail industry will work together to revise rules on the operating hours of big-box retailers to allow early morning deliveries on days the stores have to close under regulations. The government is also seeking to allow the greater authority to local government bodies when choosing these mandatory closing days.

In Korea, big-box retailers are required by law to close stores for two days each month on Sundays and public holidays. And, they must shut their doors from midnight to 10 a.m. Due to operational restrictions, big-box stores cannot deliver online orders on days the outlets are closed.

The regulations under the Distribution Industry Development Act were introduced in 2012 to protect mom-and-pop retail stores and traditional open-air marketplaces. But there have been complaints that the closing on Sundays makes it difficult for double-income families to grocery shop. There also have been arguments that the current store hour restriction isn’t helping much to improve the business of small retailers as online shopping has become the new trend.

Big retailers are struggling to catch up with e-commerce giants as the online shopping market expands rapidly. According to Statistics Korea, online shopping transactions jumped more than fivefold in 10 years to reach 187.1 trillion won ($147 billion) in 2021. Demand for early morning delivery services for online orders is growing even faster, with the market expected to expand to 9 trillion won in 2022 from 2.5 trillion won in 2020, according to a report by Kyobo Securities Co.

Local governments, including Daegu city, are exploring ways to revise the store closing days to allow big retailers to close stores on weekdays instead of Sundays.