South Korea Squeezes Big Box Retailers

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Tesco, after a tedious delay, has opened a 3,000 square meter store in South Korea, it's first such store outside of Britain. The delay was caused by discussions over the store agreeing not to put into shelves fifteen items such as radishes, mangoes and some parts of beef.

This is the situation that many retailers, not just Tesco and Costco are facing in South Korea. Government demands these specific items be left off shelves to protect local merchants. Another major stumbling block is to fine the superstores when they open a store without the consent of local merchants.

These are clear signs that investors would be put off by these restrictions, as well as the fact that they are violative of GATT rules in effect as well as the trade agreements signed between the United States and the European Union.

Other restrictions include prohibiting retailers to operate on two Sundays a month as well as zoning restrictions on opening a store near a marketplace or flea market. Many analysts predict that investments as well as revenues on these investments would fall due to government restrictions imposed.

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South Korea

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