[Report] "This Chuseok is the Last Holiday Business"

Lotte Mart's First Store Closure in Seoul Area 'Big Market Dobong Branch'
Employees Feel Down Despite Chuseok Sales Boom

Despite Brief Peak Season, Department Stores and Large Marts Face Complex Challenges
Store Closures Continue Amid Extended Distribution Law Regulations

Traditional Markets Buzz with Digital Innovation...Signs of 'Card Accepted' and 'Baedal Minjok' Everywhere

Lotte Shopping announced a restructuring plan to close about 200 inefficient stores, accounting for 30% of its 700 offline stores including department stores, large marts, and supermarkets. In Seoul, Big Market Dobong Branch is set to close after operating until November 30. On the 29th, Big Market Dobong Branch in Dobong-gu, Seoul, is preparing to close./Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Hye-seon Lim, Min-young Cha, Seung-jin Lee] On the afternoon of the 28th, two days before the Chuseok holiday, the warehouse-style discount store "Big Market Dobong Branch" of Lotte Mart located in Dobong-gu, Seoul, was bustling with customers purchasing ritual items and gift sets despite it being daytime. According to the Dobong branch, the store was unusually crowded from the moment it opened, operating all 10 checkout counters in the morning. Due to mandatory closure regulations, the store was closed the previous day, causing local residents to flock early in the morning to shop.

Despite enjoying a rare Chuseok sales boom amid the COVID-19 pandemic, the employees' expressions were somber. Big Market Dobong Branch, which opened in 2013, will have its last Chuseok this year. It will close on November 30. An employee, Mr. A, met at the store, said, "This is the 10th and last Chuseok at this store," adding, "We poured a lot of affection into the store with regular customers, so it is disheartening that the concerns we had have become reality." The reason for the greater regret over the closure decision is that customer numbers significantly increased after the membership system was abolished in June.

Although customers increased and sales normalized, the main reason for the closure decision is largely due to the recent passage of the five-year extension of the Distribution Industry Development Act in the National Assembly, which enforces mandatory closures twice a month. Due to accumulated deficits caused by various regulations, it is difficult to recover losses, so offline stores continue to close. Businesses have no choice but to shift their focus to online channels, where regulations are less stringent.

The commercial districts centered around large marts are also facing a crisis. Local merchants are deeply worried. Park Sang-young (pseudonym, 48), who runs a restaurant, said, "Many customers who come to shop also visit the restaurant, so if the store closes, it will directly impact sales," adding, "If this large store becomes empty, the entire adjacent commercial district will inevitably deteriorate."

Citizens are shopping at Cheongnyangni General Market in Dongdaemun-gu, Seoul, three days before Chuseok, the biggest traditional holiday of the Korean people. Photo by Jinhyung Kang aymsdream@

On the same day, Lotte Department Store's main branch in Sogong-dong, Seoul, was crowded with people buying last-minute Chuseok gifts. There were especially many customers purchasing Korean beef and fruit gift sets. An employee selling Korean beef explained, "Due to the impact of COVID-19, more people are buying gifts than usual to express their regret for not being able to visit their hometowns." The wine section attracted customers in their 30s and 40s. Office worker Kim Jeong-hee (35) said, "I usually visit my hometown and meet friends every year, but since I can't go this year, I stopped by the department store to send my feelings through gifts."

Consumers also opened their wallets during the autumn regular sale. On this day, Shinsegae Times Square was filled with customers in their 20s and 30s browsing clothing and cosmetics. The living goods hall, which occupies an entire building with about 90 lifestyle brands, was also crowded. Shinsegae Department Store's main branch experienced a sales increase of 9.7% over the past weekend, enjoying a sales boom.

Although the department stores enjoyed a rare boost from the Chuseok peak season and autumn sales, the situation is complicated. The political sphere has proposed weekend sales restrictions for department stores and complex shopping malls. A department store official explained, "If the amendment to the Distribution Industry Development Act passes, forcing mandatory closures for department stores, outlets, and complex shopping malls, it will be a law that causes crises like those faced by large marts, and the business environment will inevitably worsen."

On the 28th, promotional phrases related to delivery and online orders were posted throughout Suyu Traditional Market in Gangbuk-gu, Seoul. (Photo by Cha Min-young)

Unlike large marts and department stores that cannot fully smile even during brief peak seasons, traditional markets were lively. At Suyu Traditional Market, long lines formed at food stalls selling jeon (Korean pancakes), rice cakes, songpyeon (half-moon shaped rice cakes), kimchi, seasoned vegetables, fresh produce, and ritual table items, as well as market specialties like spicy red skate sashimi salad, mini gimbap, twisted doughnuts, and dumplings. The traditionally lively market is undergoing digital innovation. Throughout the market, signs promoting services such as "Card Accepted," "Onnuri Gift Certificates," "Zero Pay," as well as "Noljang (Come to the Market) App Accepted," and "Baedal Minjok" were displayed.

It is also notable that real-time delivery across the Gangbuk area of Seoul has become possible through Naver Smart Store's "Shopping in Our Neighborhood" and the public delivery app "Noljang (Come to the Market)." Even on mandatory closure days for large marts, people who previously avoided traditional markets are now visiting them in line with digital transformation. Han Ju-yeon (pseudonym), owner of a dumpling shop, said, "I was worried as customer visits stopped due to large mart sales regulations, but since starting online services, orders have steadily increased," adding, "Currently, delivery managers collect and deliver products, but it would be great if public support for related personnel and resources expands."