IKEA may face mandatory regular closures in South Korea

By Yoon Ja-young

Large-scale specialty stores such as IKEA and Daiso may be subject to mandatory regular closings every two weeks in South Korea as the nation’s government is set to study the validity of such a regulation.

According to the Korea Small Business Institute, it will begin research on the appropriateness of the regulation on large-scale specialty stores this month. It will examine whether they are hurting small shops and whether the regular closures are necessary, at the request of the Ministry of SMEs and Start-ups. If the study determines the regulation is necessary, IKEA and Daiso will have to close two Sundays a month.

The restriction on such large-scale specialty stores has become the thorniest issue in the retail industry.

Currently, large retail outlets such as E-mart, Home plus and Lotte Mart are subject to restrictions on operating hours following a revision of the Distribution Industry Development Act in 2012 aimed at protecting small shops. Local governments adopted ordinances based on the act, forcing large retail outlets to close on the second and fourth Sunday of the month.

However, critics have called it unfair since only retail outlets are subject to the regulation while shopping malls such as Shinsegae Group’s Starfield and specialty shops like IKEA were exempted.

“They are categorised as specialty stores, but in fact they are selling as many items as retail outlets. They are expanding their business scope rapidly,” a spokesperson for the Korea Federation of Micro Enterprise said.