“It’s Killing Me, This Eating Business”

An ex-bank employee Mr. A opened a Chinese franchise restaurant two years ago after his retirement. As the business prospered, he took up a bank and private loan to open four shops in Dongdaemun and Guri. However, with a rapidly decreasing income since the start of this year, he is under great capital pressure.

Mr. A says, “Although my shops are in great locations, our sales have decreased by 30 percent. Prices have increased while rents and employee salaries stay the same.” He is trying to sell three of his shops, but no one buys them.

Sohn Jong-tak, who has run a meat restaurant for 11 years, suffered his first loss in this summer. There were only two reservations for the day before yesterday night as well.

Popular restaurants are being affected by the economic crisis. Even more affected are the little shops in the narrow alleys between houses. Moreover, as the amount of tax increase with decrease in tax-exempt ratio of income and surtax and as credit card commission fee doubles, it is only natural to hear sighing everywhere.

“Gangnam Dongtaejjim,” located in Yeoksam-dong, Seoul, is famous for its cheap price of 6,000 won and delicious food. However, customers have decreased by 30 percent after Chuseok (Korean Traditional Harvest Festival). It sacked two of its employees recently.

Real estate agents state that even though restaurants on Teheran Street are selling at premium free, there is no one who wants to take them.

The crisis is mainly due to the long-term recession. Furthermore, the fact that tax-exempt ratio of credit card sales from surtax decreased from two to one percent puts huge pressure on restaurants.

On September, the amount of principals and interests of sole proprietors due to be paid to the bank added up to 2.6 trillion won, which is 44 percent higher than that of last December.

The result is an increasing number of closed down restaurants. According to the Korea Restaurant Association (KRA), which has 450,000 members, in September there were 157,411 closed shops. Adding 170,000 closed smaller shops, which are not members, the number will increase. Fifty thousand restaurant keepers under KRA are planning to demonstrate in front of Yeouido on November 2 with 400 cauldron lids for their right to survive. Vice president of KRA, Park Young-soo, announced that the government has to reduce tax as the rise in taxes in a bad economy has forced them to pay 1,700 to 1,800 won for selling 10,000 won worth of food.

Im-Sook Ha Jae-Yun Jung artemes@donga.com jaeyuna@donga.com