In this blog post, we examine whether South Korea’s regulations on large supermarkets are effectively achieving their original purpose of protecting traditional markets and local commercial districts, and whether there is a need to maintain this system in the face of a changing retail landscape.
Why Were the Operating Restrictions on Large Supermarkets Introduced?
In December 2010, a large crowd gathered in front of a large supermarket in Jeonju. Jeonju City Council member Jo Ji-hoon read a joint resolution calling for the protection of small supermarkets’ right to survive, and citizens chanted slogans together. This was in response to the deterioration of the surrounding commercial district following the opening of a large supermarket in Jeonju in 2007. This movement led to a voluntary boycott of large supermarkets by citizens in 2011. Among these efforts, the so-called “coin shopping campaign”—in which people shopped at large supermarkets using only coins—was reported by the media, propelling the issue of large supermarkets into the national spotlight. Against the backdrop of this social debate, the Distribution Industry Development Act was amended in 2012, and subsequently, restrictions on operating hours for large supermarkets and a system requiring two mandatory closing days per month were implemented. Even today, the Distribution Industry Development Act stipulates that local governments may restrict the operating hours of large supermarkets or designate two mandatory closing days per month. However, while public holidays are generally designated as mandatory closing days, the system has been revised to allow for the designation of non-holiday days through agreement among stakeholders; as a result, some regions have begun implementing closures on weekdays.
Currently, the mandatory closing days for large supermarkets are not uniform nationwide. While in the past, stores often closed on the second and fourth Sundays of each month, recent trends show an increasing number of local governments shifting these days to weekdays based on local ordinances and regional conditions. In fact, starting with Daegu, a movement to shift mandatory closing days from weekends to weekdays has spread to various regions, including Seoul, Cheongju, and Busan. A 2024 survey by the Korea Chamber of Commerce and Industry found that an average of 81% of consumers in Seoul’s Seocho-gu and Dongdaemun-gu districts, as well as Cheongju City in North Chungcheong Province—all of which have shifted their mandatory closing days to weekdays—reported satisfaction with the change. Even now, more than 10 years after the system was implemented, the debate continues over whether operating restrictions on large supermarkets are actually effective in revitalizing traditional markets and local commercial districts. This is why opinions are sharply divided between those who argue the mandatory closure system should be maintained and those who believe it should be abolished or relaxed.
Is the argument for maintaining operating restrictions on large supermarkets valid?
The arguments from those who support maintaining the regulations on large supermarkets are as follows. First, they argue that restricting the operations of large supermarkets can revitalize traditional markets and neighborhood commercial districts. The logic is that if large supermarkets close twice a month, as is currently the case, consumers who intended to shop on those days will be unable to use them and will naturally turn to traditional markets or neighborhood stores as alternatives. By restricting the operations of large supermarkets and thereby dispersing consumer choice to some extent, consumption concentrated in large supermarkets can be redirected toward traditional markets and local commercial districts.
Second, the argument cites the fact that some European countries, such as France, Germany, and the United Kingdom, have also regulated the establishment and operations of large retail stores. In France, a system has been in place requiring that the establishment of large retail stores be reviewed for compliance with urban planning and land-use regulations and that approval be obtained from the relevant authorities. In the United Kingdom as well, regulations through urban planning policies have been implemented to prevent the indiscriminate expansion of large-scale stores, and operating hours have also been subject to certain restrictions. Germany, too, has regulated operating hours on a regional basis, such as by restricting Sunday operations for large retail stores. Citing these examples, proponents argue that regulations on large-scale retail stores are not unique policies specific to certain countries, but rather policies that have been utilized in many nations to maintain a balance between the retail market and urban areas.
Third, it is argued that regulations on large supermarkets serve as a means to realize the spirit of economic democratization. The argument is that the concentration of economic power and wealth in the hands of large corporations must be mitigated through legislation. The basis for this argument is that the entities operating large supermarkets include both South Korean and foreign conglomerates, and that the entry of their large-scale stores has caused harm to many small and medium-sized businesses. Article 119 of the Constitution of the Republic of Korea stipulates that the state may regulate and adjust the economy to ensure balanced economic growth, stability, and the equitable distribution of income. Therefore, it is argued that regulating large supermarkets is an appropriate measure the state can implement to promote economic democratization and is consistent with the direction of economic development pursued by the Republic of Korea.
What are the limitations of operating regulations on large supermarkets?
However, this argument has several weaknesses. First, it is difficult to conclude that operating restrictions on large supermarkets necessarily help increase sales at traditional markets. This is because consumer spending patterns have changed since the regulations were implemented. A 2012 survey found that 35.6% of respondents believed there would be no change in consumption patterns following the implementation of the mandatory closing day system, while 33.5% said they would do their shopping the day before the closing day. Furthermore, the number of consumers using department store food sections, corporate-owned supermarkets, and the online shopping platforms of large supermarkets—which remain open on days when large supermarkets are closed—has also increased. This phenomenon demonstrates that just because large supermarkets close their doors does not mean that all that consumer spending shifts to traditional markets. In particular, given the significant growth of alternative distribution channels today—such as online shopping, early-morning delivery, and food delivery platforms—it has become even more difficult to conclude that the closure of large supermarkets directly leads to increased sales at traditional markets. An analysis by the Korea Development Institute (KDI) in 2026 of regions that shifted mandatory hypermarket closure days from weekends to weekdays also found that while hypermarket sales increased, there was no corresponding decrease in sales at other offline retail formats, such as traditional markets. The increase in hypermarket sales was attributed to a shift of some online consumption back to offline consumption.
Second, the argument that restricting the operating hours of large supermarkets is a common practice in developed countries fails to sufficiently consider the reality in South Korea and the institutional differences between countries. Although annual working hours in South Korea have decreased significantly compared to the past, they remain longer than the OECD average. In 2025, South Korea’s annual actual working hours were 1,833 hours—97 hours more than the OECD average—ranking sixth among comparable OECD member countries. Therefore, it is still necessary to consider that some South Korean consumers find it difficult to set aside sufficient time during the week and thus do their grocery shopping on weekends. However, the retail environments in South Korea, France, Germany, the United Kingdom, and other countries are not identical, and the regulations on large retail stores in each country also differ in terms of the timing and purpose of their introduction, urban planning systems, and labor conditions. In particular, while some European countries have long managed the indiscriminate spread of large-scale retail stores through urban planning and location regulations, South Korea’s regulations on large supermarkets were introduced—after such stores had already become established nationwide—by restricting operating hours and mandatory closing days. Given that a significant portion of consumer spending has already shifted to large-scale retail channels, including large supermarkets, imposing uniform restrictions on operating hours could potentially cause inconvenience to consumers.
Third, it is difficult to argue that restricting the operations of large supermarkets necessarily contributes to economic democratization. As of the first half of 2013, the benefits resulting from regulations on large supermarkets were estimated at 90 billion won, while the losses were estimated at 825.06 billion won. An analysis at the time indicated that large supermarkets suffered losses of 279.7 billion won, suppliers incurred losses of 194.2 billion won, and consumer benefits decreased by 343.6 billion won.
The 90 billion won in benefits fell short of not only the total losses but also the losses incurred by suppliers alone. In particular, considering that a significant number of companies supplying goods to large supermarkets are small and medium-sized manufacturers and distributors, it is difficult to argue that regulations on large supermarkets necessarily serve the interests of small and medium-sized merchants. Therefore, the claim that operating restrictions on large supermarkets contribute to economic democratization also requires a thorough review of their actual effects.
How should large supermarkets and traditional markets coexist?
One of the key reasons large supermarkets have become so widespread throughout South Korea—to the point of eroding the market share of traditional markets—is that consumers have preferred them over traditional markets when shopping. As demand for large supermarkets grew, the number of stores increased and service quality improved; however, traditional markets were unable to keep pace with these changes, leading to a relative decline in their competitiveness. Meanwhile, simply regulating the operating hours of large supermarkets without sufficiently improving the competitiveness and shopping environment of traditional markets makes it difficult to fundamentally change consumer choices; it may even result in a shift in consumption toward other distribution channels, such as online shopping. Therefore, to ensure that traditional markets can secure the competitiveness needed to win over consumers while competing with large supermarkets, restricting the operations of large supermarkets alone is insufficient.
Looking back now, more than 10 years after the implementation of operating hour regulations for large supermarkets, it is necessary to reexamine whether the mandatory closing day system has fully achieved its original purpose. The retail market has changed so drastically that it is difficult to compare it to the situation at the time the system was introduced. With the rapid growth of new retail channels—such as online shopping, early-morning delivery, delivery platforms, and Chinese e-commerce—the structure whereby consumers automatically shift to traditional markets when large supermarkets are closed has weakened. A recent analysis by the Korea Development Institute (KDI) also showed that in regions where mandatory closing days were shifted from weekends to weekdays, sales at large supermarkets increased, while sales at other offline retail formats, such as traditional markets, did not decline accordingly. This demonstrates the need to redesign the regulatory approach and objectives to align with the changing retail environment, rather than taking a binary approach of either unconditionally maintaining or abolishing operating restrictions on large supermarkets. Given that large supermarkets and online retail already play a significant role in South Korean consumer life, any approach that uniformly restricts consumer access must be carefully considered. Therefore, for traditional markets and large supermarkets to coexist and thrive together, it is necessary to explore other ways to enhance the competitiveness of traditional markets and adapt to the changing consumer environment, rather than relying solely on uniform restrictions on large supermarket operations.
