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Gov't hit for ambiguous countermeasures on retailers

Starbucks Korea's store in Seoul was closed to visitors and only allows take-out orders under the government's new regulations amid a resurgence of COVID-19 infections nationwide. / Korea Times photo by Bae Woo-han
Starbucks Korea's store in Seoul was closed to visitors and only allows take-out orders under the government's new regulations amid a resurgence of COVID-19 infections nationwide. / Korea Times photo by Bae Woo-han

By Kim Jae-heun

The government's recent anti-COVID-19 countermeasures imposed on local retailers are being criticized for their ambiguity.

According to the quarantine authorities, all restaurants in the capital area must close for walk-in customers at 9 p.m. from Aug. 30 to Sept. 6 and they can only make food for takeout or delivery until 5 a.m.

In the case of coffee shops, franchise brands cannot allow customers in the store and they can only serve take-out or delivery orders. However, privately owned cafes can seat customers inside.

This is unfair for coffeehouse chains such as Starbucks Korea, which make most of their sales from customers visiting the shops.

Starbucks Korea currently operates 1,460 shops across the country with 900 of them located in Seoul, Gyeonggi Province and Incheon. It gets 40 percent to 50 percent of its revenue from takeout services and does not offer delivery.

Local coffee franchise Ediya, which owns the largest number of stores across the country with over 3,000, is struck hardest by the equivocal regulation.

Ediya only has two stores managed directly under the headquarters and the rest are all franchises operated by individuals.

"The situation is different for us unlike Starbucks, which operates all its stores under direct management. Independent business owners are vulnerable to immediate economic damage and obviously they express concern and complain about the government's unfair action," an Ediya official said. "For us, it is right to follow the government's guidelines thinking about what is going on in our society and witness the rising number of COVID-19 cases."

Over 1,600 Ediya shops are prohibited from serving customers until Sunday.

The country's largest bakery franchise operator SPC Group has luckily avoided the restrictions as its Paris Baguette is registered as a bakery.

Bakeries are included under the category of restaurants so they are also permitted to accommodate customers any time from 5 a.m. to 9 p.m. However, patisseries can have customers to drink coffee along with desserts.

Fast food restaurants are also worried about the government's restrictions.

"There is a considerable amount of revenue coming from operating 24 hours a day. Because we are force to close from 9 p.m. we are expecting some decrease in sales," an industry source said.

However, the outlook for fast food restaurants is not hopeless compared to that of coffeehouse chains because 50 percent of their sales comes from delivery and take-out.

"Normal restaurants are allowed to bring in customers under the new guidelines so it won't affect them much as they will close only one hour earlier. However, for coffeehouse chains, not being able to take customers will have a huge impact on their sales," a Lotte GRS official said.

Lotte GRS operates both fast food restaurant Lotteria and coffee franchise Cafe Angel-in-us.

"We are reviewing countermeasures to fight this emergency case."

The Korea Foodservice Industry Association (KFIA) see big economic damage in the market as only 30 percent of restaurants operate a delivery service.

"Nearly 70 percent makes profits solely from selling food inside the restaurants and so it is inevitable for them to suffer losses. Local restaurants and bars will be hurt the most," a KFIA official said.


Starbucks Korea's store in Seoul was closed to visitors and only allows take-out orders under the government's new regulations amid a resurgence of COVID-19 infections nationwide. / Korea Times photo by Bae Woo-han
Starbucks Korea's store in Seoul was closed to visitors and only allows take-out orders under the government's new regulations amid a resurgence of COVID-19 infections nationwide. / Korea Times photo by Bae Woo-han

By Kim Jae-heun

The government's recent anti-COVID-19 countermeasures imposed on local retailers are being criticized for their ambiguity.

According to the quarantine authorities, all restaurants in the capital area must close for walk-in customers at 9 p.m. from Aug. 30 to Sept. 6 and they can only make food for takeout or delivery until 5 a.m.

In the case of coffee shops, franchise brands cannot allow customers in the store and they can only serve take-out or delivery orders. However, privately owned cafes can seat customers inside.

This is unfair for coffeehouse chains such as Starbucks Korea, which make most of their sales from customers visiting the shops.

Starbucks Korea currently operates 1,460 shops across the country with 900 of them located in Seoul, Gyeonggi Province and Incheon. It gets 40 percent to 50 percent of its revenue from takeout services and does not offer delivery.

Local coffee franchise Ediya, which owns the largest number of stores across the country with over 3,000, is struck hardest by the equivocal regulation.

Ediya only has two stores managed directly under the headquarters and the rest are all franchises operated by individuals.

"The situation is different for us unlike Starbucks, which operates all its stores under direct management. Independent business owners are vulnerable to immediate economic damage and obviously they express concern and complain about the government's unfair action," an Ediya official said. "For us, it is right to follow the government's guidelines thinking about what is going on in our society and witness the rising number of COVID-19 cases."

Over 1,600 Ediya shops are prohibited from serving customers until Sunday.

The country's largest bakery franchise operator SPC Group has luckily avoided the restrictions as its Paris Baguette is registered as a bakery.

Bakeries are included under the category of restaurants so they are also permitted to accommodate customers any time from 5 a.m. to 9 p.m. However, patisseries can have customers to drink coffee along with desserts.

Fast food restaurants are also worried about the government's restrictions.

"There is a considerable amount of revenue coming from operating 24 hours a day. Because we are force to close from 9 p.m. we are expecting some decrease in sales," an industry source said.

However, the outlook for fast food restaurants is not hopeless compared to that of coffeehouse chains because 50 percent of their sales comes from delivery and take-out.

"Normal restaurants are allowed to bring in customers under the new guidelines so it won't affect them much as they will close only one hour earlier. However, for coffeehouse chains, not being able to take customers will have a huge impact on their sales," a Lotte GRS official said.

Lotte GRS operates both fast food restaurant Lotteria and coffee franchise Cafe Angel-in-us.

"We are reviewing countermeasures to fight this emergency case."

The Korea Foodservice Industry Association (KFIA) see big economic damage in the market as only 30 percent of restaurants operate a delivery service.

"Nearly 70 percent makes profits solely from selling food inside the restaurants and so it is inevitable for them to suffer losses. Local restaurants and bars will be hurt the most," a KFIA official said.


Kim Jae-heun jhkim@koreatimes.co.kr


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