Finally managed to open the Tesco PLC (TSCO.L), the super store of nearly 30,000 square meters outside the largest market in South Korea, the United Kingdom, after a seven-month delay does not agree with the stock 15 projects, including carrots, mango and cut local beef.
Big box retailers such as Tesco and Costco Wholesale Corporation (COST.O) in South Korea reluctantly give in to the request of the Government, aimed at protecting local businessmen - including planning Goblin super store, if they do not agree to the nearby local businessman.
There are indications that Seoul's new restrictions may scare off investors.
Homeplus Group, Tesco's Korean subsidiary, Chairman Lee Seung-Han said: "In my opinion, this is no longer the many strengths of the investment in the Korean market. (Tesco) the headquarters of the investment will be reduced,".
Not a long time to sign a free trade agreement, with the price of the product in the European Union and the United States, from the source to reduce the shelf wine, the Korean government last year began to tighten control of the hypermarket operators.
The new rules prohibit big box retailers from one month to run two Sundays, and that further measures would prohibit them from a nearby market to open an outlet with mom and suppliers rows into effect this month.
Said Licheng Xian, the Homeplus, Tesco, not considering leaving, but he acknowledged that the regulatory and market saturation, new investment into the South Korean market, the outlook for 1999 is bleak.
On Wednesday, the world's third largest retailer, Tesco shopping (Tesco), the annual results report, analysts expect from Korean business income will decline due to government restrictions.
The fierce competition in South Korea has been to get rid of Wal-Mart Stores Inc. (WMT.N) and Carrefour (Carrefour SA) (CARR.PA), whether it is pulled out in 2006. Only nine stores in the country and the large U.S. retailer Costco less than it has in Japan.
"The large-scale discount stores are going through a very difficult period, due to the operation of the slowdown in economic growth over the time and business days and regulations and weak consumption," Lee told the gathering last week on behalf of the local farmers.
TESCO compression
Tesco (Tesco), the South Korean business accounted for roughly 10% of its global sales, the Homeplus super store has yet to open in Seoul said, cost the company 70 billion won ($ 61.63 million), from the loss of potential sales .
In order to appease the small retailers and the opening of stores in March, paving the way to the nearby mom and pop store exclusive rights to sell these goods from the shelves Homeplus agreed to cancel 15.
Face such as E-Mart cooperation and Lotte Mart, Lotte Shopping has a strong local brand fierce competition, HOMEPLUS expand two stores in 1999 to 133 stores starting in 2012 as a joint venture of Samsung C & T company.
But now Homeplus extruded feel.
In August last year, Tesco Homeplus stores and shopping malls space, the total funds raised over three million pounds to complete the property sale and leaseback transactions.
The "Homeplus has turned to a conservative investment strategy, including asset sales expansion becomes difficult, said:" the sodium Young, an analyst at rating Fitch Ratings in Korea.
Korea's largest overseas market, as well as the British retailer Costco refused to disclose the size of its Korean operations.
On the road, more tightening
Last year, the Government response to public criticism of its policy in favor of a strong consortium, through the introduction of new measures, a fair competitive environment, and lead to the widening income gap.
A big box retailers were forced to close for 2 days, monthly new restrictions on result in HOMEPLUS sales fell 4.4% last year, according to officials of the sales and knowledge.
A law requiring discount shop is closed between 10:00 midnight is expected to reduce revenue increased by 5% per quarter, in addition to the monthly two said Sunday, Hyundai Securities analyst Lee Sang District. The law has received parliamentary approval and is expected to be implemented in the first half of 2013.
The Homeplus digital declined to comment. The Costco company also declined to comment.
The new Conservative government in Seoul - last year's election promise to help the mom and pop stores - looks to impose further restrictions.
A new law came into effect on April 24, the the authorized regional government prohibited new stores, within one kilometer of the traditional markets, including some of the country's 1,517.
Seeks to require large retailers to pay 10% of the income of the store as a penalty, if they are not near the merchants agreed to set up - standing on a steep fine considering the average profit margin of Discount Stores around 6% in 2011 and an Act of Parliament to review this month According to data from the Korea Chamber of Commerce and the Chamber of Commerce and Industry (KCCI).
Foreign retailers anxious
Government angered the new restrictions on foreign players such as Costco, the national concern future entries.
Costco defy closed for two days, the monthly local legislation, prompted the authorities to crackdown on the small parking lot and breach of saftey, the Seoul store.
Costco's competitors, including Homeplus, E-Mart and Lotte Mart has successfully hit limitations and injunctions, same-store remain open without penalty. But not a member of Costco ban.
Costco's country manager Raper Seoul in November legislature perception the Costco's contempt for the laws of the city expressed regret, but that the legislation is considered to be defective by the local court.
Up to now, all nine Costco stores in Korea is closed twice a month.
Another international retailers, the Swedish furniture group IKEA still waiting for the 78,198 square meters of land bought two years ago city officials - including the mayor - trying to defuse the protests, allows to open a shop.
Wringing concessions like Tesco (Tesco) and support from the government, small businesses say they are still under pressure.
Homeplus newly opened shop in an open market near Seoul, the store's owner, said sales have decreased by 20-30%.
Merchants trying to become more competitive, but there are limitations, "Park Chur Yu said that they had sold 26 years not far from where" Le plans to open a new store in December.
"There have been a Costco (Costco) and our traditional market within 1 km of the E-Mart, if the store is open, about 1,200 merchants and their family members will be turned born on the streets."
However, other Korean worried that the new rules would violate their shopping habits.
The big box stores provide a wider choice of goods one stop down the cut-throat competition between the major retail chains, convenience, such as easy parking, and affordable price.
"I understand, traditional markets are having a hard time, but we will go to the (traditional market), if they made it easier to shop it did not order on Sunday to close the policy, it's about good product, cheaper price and easier parking, said: "Kim Seung Won, a HOMEPLUS shoppers.
 
 



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