Business Restriction Reduced from 8 Hours to '1 Hour'
On the 1st, at Emart Yangjae Branch in Seocho-gu, Seoul, where the district has shifted the mandatory closure day for large marts from Sunday to weekdays and started to significantly reduce the business restriction hours to one hour for the first time nationwide, a notice about extending the closing time by one hour from July is posted. Photo by Kang Jin-hyung aymsdream@
Seocho-gu, Seoul, has become the first district in the country to effectively allow large supermarkets to operate overnight. With the possibility of early morning delivery from large supermarkets and corporate supermarkets (SSM) in Seocho-gu, attention is focused on whether this will expand nationwide.
According to the distribution industry on the 2nd, Seocho-gu changed the operating restriction hours for large supermarkets from the previous 8 hours (midnight to 8 a.m.) to 1 hour (2 a.m. to 3 a.m.) starting the day before. Seocho-gu had previously announced this change through an administrative notice in May.
As a result, four large supermarkets in Seocho-gu, including Emart Yangjae Branch, Lotte Mart Seocho Branch, Kim's Club Gangnam Branch, and Costco Yangjae Branch, as well as 33 quasi-large stores such as Lotte Super and Homeplus Express, can now operate online sales including early morning delivery without restrictions on operating hours.
However, no large supermarket in Seocho-gu has started early morning delivery yet. This is due to low profitability caused by the limited service area. According to the Seoul Open Data Plaza, as of 2022, Seocho-gu has 154,471 households, ranking ninth among Seoul’s basic local governments in terms of the number of households. It accounts for only 3% of the total households in Seoul (about 4.09 million households).
An industry insider said, "For early morning delivery, a single delivery vehicle needs to deliver about 40 or more products to break even. However, since early morning delivery companies are already handling existing volumes, starting additional early morning delivery is burdensome in terms of cost."
In fact, Emart has introduced early morning delivery in some metropolitan areas including Seoul and Incheon through SSG.com. Seocho-gu is also an early morning delivery area for SSG.com. Lotte Group enables early morning delivery in Seocho-gu through its e-commerce platform Lotte ON, using next-day delivery service 'Naeil Onda' for Lotte Mart and Lotte Super delivery volumes. Homeplus is conducting 'same-day delivery' through Homeplus Express in Seocho-gu but stated that it is not considering early morning delivery service. Kim's Club is providing early morning delivery in the Gangnam area through Oasis Mall.
Within the distribution industry, there are calls to lift operating restrictions on large supermarkets nationwide through amendments to the Distribution Industry Development Act. Previously, on the 27th of last month, Rep. Choi Su-jin of the People Power Party announced plans to introduce an amendment to the Distribution Industry Act that would allow online delivery during restricted operating hours and mandatory holidays for large supermarkets.
The amendment includes provisions for the Minister of Trade, Industry and Energy to annually review the validity of operating hour restrictions and other matters, consult with the Distribution Win-Win Development Council, and take measures to improve them. It also allows large supermarkets registered as mail-order businesses to conduct mail-order sales despite operating hour restrictions or mandatory holidays. Currently, large supermarkets cannot conduct online delivery during restricted hours (midnight to 10 a.m.) and mandatory holidays (principally public holidays and two days per month), and the amendment aims to improve this.
However, the passage of this amendment in the National Assembly is expected to face difficulties. Labor unions strongly oppose it, and opposition parties are preparing even stronger operating regulations. The Mart Industry Labor Union of the Korean Confederation of Trade Unions Service Federation criticized Seocho-gu’s administrative order, saying, "It is common knowledge that night work is a Group 2 carcinogen," and asked, "Is Seocho-gu saying it is acceptable to harm workers’ health for the benefit of large distribution companies?"
Progressive Party lawmaker Jeong Hye-kyung is preparing an amendment to the Labor Standards Act to legally regulate the cessation of night work and Sunday operations at large supermarkets.
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