"Year-end Parties Back On?"... Impeachment Passed, Dining Industry Expects 'Year-end Boom'

Chairman Woo Won-sik and Political Circles Urge Resumption of Year-End Gatherings
Nine out of Ten Small Business Owners Say "Sales Down After Emergency Martial Law"
Food Service Industry "Hopes for December Amid Return to Normalcy"

"We urge you to resume the year-end parties that were canceled. Small business owners, self-employed individuals, and neighborhood economies are struggling too much."

Speaker of the National Assembly Woo Won-sik made this statement on the 14th, after the impeachment motion against President Yoon Seok-yeol was passed. This remark came from the urgent need to revive the economy as all major commercial districts and neighborhood markets staggered following the declaration of martial law. With high inflation causing consumers to close their wallets, the dining industry, which had already been shrinking, faced threats to their livelihoods as reservations were repeatedly canceled after the martial law declaration. Although the situation remains severe, with the impeachment motion having passed the National Assembly and politicians and local governments urging the resumption of year-end parties, the dining industry is expressing hope that consumer sentiment will recover.

On the 13th, Myeongdong Street in Jung-gu, Seoul, is showing a quiet scene amid concerns that the influx of foreign tourists may decrease due to the chaotic political situation, including the president's announcement of martial law. Photo by Kang Jin-hyung

According to the dining industry on the 16th, since the martial law incident on December 3, scheduled year-end parties have been canceled one after another, and inquiries about year-end gatherings have sharply declined, severely impacting major commercial districts such as Gwanghwamun, Yeouido, Myeongdong, and various neighborhood markets.

The contracted economy is also confirmed by actual indicators. A survey conducted by the Korea Federation of Small and Medium Business from the 10th over three days, targeting 1,630 small business owners nationwide engaged in food and lodging, wholesale and retail, and personal services, found that 88.4% of respondents reported a decrease in sales after the declaration of martial law.

There are also forecasts that this sales decline will negatively affect the achievement of this year’s Gross Domestic Product (GDP) target. According to a report titled "South Korea, the Impact of Political Instability on Growth Rate" released by NH Investment & Securities, the martial law incident has led to a contraction in year-end consumption by citizens and a decrease in foreign tourists visiting Korea, which is expected to reduce this year’s GDP growth rate by 0.04 percentage points.

Jung Yeo-kyung, an economist at NH Investment & Securities, explained, "We estimated the scale of growth rate damage assuming that December sales in neighborhood markets and domestic consumption by foreigners were reduced by 5% due to the impeachment crisis." The Bank of Korea’s forecast for this year’s economic growth rate is 2.2%, but it may be difficult to achieve this due to the martial law incident.

Accordingly, as some instability has been alleviated with the passage of the impeachment motion, voices are growing louder that the economy, which has been in recession, must be revived starting from neighborhood markets. The Korea Federation of Small and Medium Business stated, "Due to a series of incidents causing reservation cancellations and consumption contraction, the year-end special demand has not materialized, and the already difficult situation of small business owners has been pushed to the extreme," adding, "Now that the situation has shifted, we earnestly ask the public to visit small business stores that brighten the streets with confidence."

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok also said, "Please proceed with the planned gatherings and events to support small business owners who are struggling." Various local governments, in addition to the political sector, are encouraging the resumption of year-end parties. Yuseong-hoon, Mayor of Geumcheon District, proposed, "To revitalize the local economy, let’s calmly resume the canceled year-end parties."

With the noticeably changed atmosphere, the dining industry is also growing expectations for the year-end special demand again. A dining industry official said, "Since the impeachment motion was passed, the atmosphere is returning to normal, so the dining industry is expecting the December special demand such as Christmas and year-end parties," adding, "As this is considered a ‘peak season’ for the industry, we plan to strengthen promotions and benefits and monitor future trends."

On the other hand, there is also hope that the won-dollar exchange rate, which sharply rose after the martial law incident, will stabilize, reducing the burden of imported raw material costs. Another dining industry official said, "For establishments that mainly use imported ingredients, the cost burden due to exchange rate fluctuations was significant, so there was much concern," adding, "It is somewhat fortunate that the market is gradually stabilizing with the passage of the impeachment motion." However, they added, "It seems it will take time for a complete resolution, so it will be difficult to expect the usual year-end special demand."