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Due to the Corona 19 incident, the number of PC cafes closed from February to November this year increased by 47.7% compared to the same period last year. On the 14th, at the Seonin Mall in Yongsan-gu, Seoul, a merchant moves a stack of used PCs to a cart. Journalist Eun-gu Kang [email protected]
Choi Mo, who ran a 130-seat PC room in Jongam-dong, Seoul, reported the business closing on the 1st. In January this year, he spent 300 million won to replace it with a state-of-the-art PC and new interior. After the opening, sales of 40 million won per month have fallen to 15 million won since August, when the second epidemic of the new coronavirus infection (Corona 19) arrived. The monthly fixed expense is 25 million won, including rent and labor. It closed its doors without bearing a deficit of more than 10 million won a month. Choi said: “If the business is closed, many business owners cannot even close their business because they are asked to rent for the remaining lease period and have to pay the cost of restoring the interior.”
As a result of an analysis by the Korea Economic Daily, the number of business closings and start-ups of 22 autonomous businesses related to food, culture, life, etc., listed in the ‘Local Administration License Data’ from the Ministry of Public Administration and Security, The number of business closures this year has increased significantly compared to the previous year. Most of them were classified as high-risk groups in the COVID-19 quarantine and received a collective ban order. The number of restaurants in general, such as bars and restaurants, has decreased quite a bit. According to the government’s level of quarantine measures, it is analyzed that the business closure pattern was divided.
From February to November this year, the door-to-door sales business closed at 3807, more than three times more than last year. The order was issued to ban the door-to-door sales business in Seoul for five months, from June to early November. As a result of the second stage measure, the closure of Danran and entertainment bars increased by 57.8% and 25.7%, respectively.
The karaoke shutdown, which was 1,175 last year, also increased 28.9% to 1,515 this year. The number of PC cafeteria closings was 4,008, an increase of 47.7% over the same period last year (2,713).
The number of overall restaurant closings nationwide from 40,748 last year decreased to 42,990 this year. The number of rest restaurants also fell 8.6%, from 17,627 to 11.16. In the industry it is analyzed that there are many entrepreneurs who choose to ‘defer the closing of their business’ in the way of eating mustard while crying. The number of startups in 17 industries, including general restaurants and breakout restaurants, decreased 25.4% on average compared to the prior year. A Small Business Federation official said, “Even if a store is presented, there are no new store owners and the demolition cost required to close a business is in the tens of millions of won, so we are bearing the shortfall.” .
50% increase in PC cafe closings … Restaurant “can’t find a new owner and just opens the door”
From February to November of this year, we analyzed the number of business closures and startups in 22 industries.
Mr. A, who opened a 30-seat restaurant in Dunchon-dong, Seoul last October, is in charge of kitchen and delivery services himself after the spread of the new coronavirus infection (Corona 19) in March this year. As sales were cut in half compared to last January, two part-time students were laid off. A new owner has not come to the store that was released in October because he could not bear the shortfall. The buyer, who had managed to get it, canceled the contract before the balance was paid at the end of last month for ‘reproliferation of the crown 19’. He said, “I looked for other stores to change the business, but I didn’t have the money to pay a 50 million won deposit, so I was forced to run the store.”
High-risk facilities, sudden increase in business closure
Most of the industries with a sharp increase in the number of business closings this year have been subjected to intense quarantine measures. Mainly, 11 high-risk facilities such as clubs, karaoke bars, entertainment bars and door-to-door sales were notable.
The biggest increase in business closings is door-to-door sales that sell rental products and cosmetics. The number of closed door-to-door sales companies from February to November was 3807, more than three times more than in the same period last year (1131). Door-to-door sales companies in Seoul were ordered to ban bundling for five months, from June to early November. Even in October, when the national distancing stage was lowered to the first stage, the door-to-door sales business between 11 high-risk facilities continued to suspend operations. This was due to the high utilization rate of the elderly over 60 years.
Meanwhile, the number of business closures, such as Danran Izakaya, and Izakaya Entertainment, which have been ordered to ban meetings multiple times, has increased significantly. The number of clubs and other entertainment pubs closed from 767 to 964, an increase of 25.7%. Danran pubs increased by 57.8% from 405 to 639 during the same period.
These industries are subject to the ban on collective distancing from step 2. However, prior to the second stage of action, there were several orders to ban the grouping of entertainment facilities in the metropolitan area. The Seoul Metropolitan Government issued orders prohibiting meetings from March 22 to April 5, April 8 to 20, and May 9 to June 14. This is because cases of group infection occurred, such as the Corona 19 infection of the Itaewon club. It has been closed from August-September and on the 24th of last month, when the second phase of distancing measures was taken. Choi Won-guk, general secretary of the Korea Food and Entertainment Industry Federation, said, “We don’t take a break all the time, and since the end of March we have been operating every two weeks. Even if I do business in the end, it will be difficult to recoup the losses. “
“Deferred trade closing due to deficit”
The high-risk facilities business also closed more than this year. PC cafes (Internet computer game facility provider business) saw a net decrease of 1,773, with 2,235 founded and 4,008 closed from February to November. Internet cafes, which had been closed for a month since August 16, were up 47.75% compared to the same period last year. The number of arcade startups (youth game providers) from 1,379 cases was cut in half to 688 cases. Door-to-door sales (-1346 locations), karaoke rooms (-1195 locations), entertainment pubs (-703 locations) and Danran bars (-477 locations) also saw a net decline this year.
On the other hand, the number of regular restaurants and rest restaurants with bars and restaurants decreased compared to the previous year. General restaurants decreased 9.5% and 8.6%, respectively, from 40.7484 to 42,990, and break restaurants from 17.626 to 11.16, respectively.
However, employers agree that the business situation is no better than last year. There were many opinions that the closing of the business is being “postponed” due to the remaining costs of rent, loans and demolition. In fact, the number of new general catering and rest establishments in February and November of this year decreased by 4.4% and 9.2%, respectively, compared to the same period last year.
A business owner who runs a pub in Gayang-dong, Seoul, said, “I received a 20 million won loan when I changed the business from a restaurant to a pub in July. The store cannot be closed until the debt is paid. “An official from the Korea Food Service Industry Association said,” When we close our business, we have to get a few pennies of the right money, but now it is difficult receive the correct money from a new tenant. If we go out of business while the lease period remains, we will not get all of the rent for the remaining period. “
Reporter Gil-sung Yang / Daeun Choi [email protected]
