Starfield Goyang in Goyang, Gyeonggi Province. (image: Shinsegae)
SEOUL, May 21 (Korea Bizwire) — Construction plans for large shopping complexes have been affected by recent government policies for regulation.
Major industry players are anxious as the government hurries to impose the same type of regulations on malls and department stores that were previously placed on large supermarkets.
The friction between such large projects and local retailers is also an attributing factor in the decision by the government to regulate the industry.
One example of the proposed regulation is a pending bill regulating mandatory closures.
But industry insiders say that if shopping malls are forced to follow current regulations that require hypermarkets to close twice a month, the impact would be greatly negative.
In the case of hypermarkets in Seoul, all stores must close on the second and fourth Sundays each month.
For a major shopping mall in the Seoul suburb of Hanam, the proposed measure would see shopper numbers fall as much as 100,000 per month if the regulation is imposed on weekdays.
On weekends, the fall would be much more dramatic with an expected loss of 200,000 potential shoppers.
Mall developers say that the government must take into account the positive roles that large shopping malls play in local communities.
They argue that newly built shopping complexes help to attract shoppers from afar, reinvigorating local economies.
Developers also claim that having a mandatory off-day would shift consumers to online shopping sites that sell the same products rather than have shoppers flock to the region’s local traditional markets.
However, neighborhood retailers do not see eye-to-eye, as many owners of small neighborhood stores have been fighting hard to keep large shopping malls from being built in their neck of the woods.
The construction of a mall in Sangam-dong in Seoul has not been able to materialize for five years due to objection from local retailers. Initially scheduled for completion in 2017, construction has been halted completely as developers and local merchants have not been able to come to an agreement.
Similarly, the Lotte Mall that opened just last month in Gunsan is facing severe opposition from local retailers.
Despite the controversy surrounding the projects, developers say that regulation is not the key to resolving the pending issues.
“The government should meticulously analyze the results that may arise from regulating shopping malls,” said one developer.
H. S. Seo (hsseo@koreabizwire.com)
