The deserted kitchen street of Hwanghak-dong… “Worst since opening”
Successive closures of restaurant businesses and decline in self-employed workers
“Move to e-commerce to purchase kitchenware for businesses”
“Some support measures for self-employed people are also needed.”
Jung-gu. /Photo=Reporter Kim Young-ri”/>
The area of Kitchen Street in Hwanghak-dong, Jung-gu. /Photo=Reporter Kim Young-ri
“It’s been 38 years in this place. It’s the worst since the store opened. It’s the worst. It’s despair.”
The area of Kitchen Street in Hwanghak-dong, Jung-gu, Seoul, visited around lunchtime on the 12th. Mr. Kim, in his 60s, said this and let out a deep sigh. Mr. Kim, who runs a kitchenware store on the main street, said, “Usually, customers who come to see the estimate now only sign a contract in a month or two, but these days, not a single customer comes to even look at the estimate.” He complained, “Let alone this month’s sales, there is no hope until next year.”
Recently, Hwanghak-dong Kitchen Street faced the risk of collapse. This is because self-employed restaurant owners are closing down one after another due to the economic downturn. In addition to the aftermath of the recession, the number of self-employed people looking for ultra-cheap kitchen appliances such as Temu and Ali is increasing, and kitchen street merchants who have been in business for 30 to 40 years are leaving one by one.
“The warehouse is left empty on purpose.”
The area of Kitchen Street in Hwanghak-dong, Jung-gu. /Photo=Reporter Kim Young-ri Hwanghak-dong Kitchen Street has been considered a ‘must-see’ for restaurant entrepreneurs in Seoul since the 1980s until recently. Because the purchase and sale of used kitchenware takes place at the same time, it could be said to be an essential course for small business owners who want to start a business with small capital.
But now the atmosphere is quite different. Kitchen Street merchants unanimously said, “We no longer accept used kitchenware.” Even if you keep it anyway, it won’t be sold, so you only incur costs such as storage and disposal.
Mr. Lee, in his 60s, who runs a two-story kitchenware store, said, “We have a warehouse on the second floor, but we do not accept any used goods.” He added, “Not only household items, but also large refrigerators and bakery showcases are sold in stores that are closing down these days. “Even if I get a call saying, ‘Just take it,’ I won’t go get it,” he complained.
At the same time, he said, “This store once had 8 employees, but now it has 2. Isn’t it going to disappear like this?” He said with bitterness, “During COVID-19, there were a lot of business closures, but there were also many small businesses such as delivery stores that opened. Now that I look at it, I was a noble person during the COVID-19 period.”
Mr. Kim, who is in his 50s, also complained, “It’s not only desolate, but even gloomy. I’m not the only one who feels that way, and the merchants around me feel the same way.”
The area of Kitchen Street in Hwanghak-dong, Jung-gu. /Photo=Reporter Kim Young-ri As I entered the alley, I saw wholesale companies that supply kitchenware under contracts with franchise brands and wedding halls. These companies also said, “There are no new restaurant openings at all.”
There was also a company that had a ‘for rent’ sign even though the store had a lot of kitchen appliances.
Mr. Choi, an employee in his 40s whom I met at a wholesale store, said, “Recently, there have been very few orders from restaurant franchise brands for kitchen equipment saying they have opened new stores,” adding, “We are making up for our sales due to the increase in new wedding hall openings.”
Mr. Choi said, “Right now, the cost of living has risen so much that I carry a packed lunch with me,” and added, “No one buys food at restaurants, so who would start a business in this atmosphere?”
“Falling behind in competition with e-commerce”
The area of Kitchen Street in Hwanghak-dong, Jung-gu. /Photo=Reporter Kim Young-ri According to the Seoul Metropolitan Government’s commercial district analysis service, the number of restaurant businesses that closed in the second quarter of this year reached 6,290. The business closure rate is 4.2%, which is equivalent to the 4.4% business closure rate in the first quarter of 2020 during the COVID-19 period.
Accordingly, the proportion of self-employed people among all employed people has also shrunk to the lowest level ever. According to the National Statistical Office, as of January to August this year, the number of self-employed people was 5.636 million, accounting for 19.7% of the total employed (28.544 million). This is the first time that the proportion of self-employed people has broken the 20% mark since related statistics were compiled in 1963.
Kim Si-wol, a professor of consumer studies at Konkuk University, said, “Not only has the number of consumers enjoying eating out decreased significantly due to high prices, but the quality of convenience foods such as meal kits has improved due to COVID-19.” He added, “The restaurant industry has also become a structure where it is left out of the competition unless it has a reasonable level of competitiveness.” It was diagnosed.
Lee Eun-hee, a professor of consumer studies at Inha University, said, “If the number of self-employed people in the restaurant industry continues to decrease, there is a risk that the cost of eating out will rise,” and added, “It may become difficult for one- or two-person households to enjoy eating out at a low price.” He also added that restaurant businesses that generate a certain level of sales need support measures to withstand the recession tunnel.
However, some analyzes say that the downturn in kitchen streets is not only due to the recession. In the case of tableware, it is possible to purchase it in bulk at a much cheaper price from Temun or Ali, and recently, large home appliances such as refrigerators made in China can be easily imported through purchasing agents, which is why offline kitchen streets are losing out in price competition. In fact, if you search for ‘restaurant supplies purchasing agency’ on a portal, you will find a flood of cheap commercial home appliances priced at less than 1 million won.
Professor Lee said, “Young small business owners source inexpensive kitchen appliances from C-commerce (Chinese e-commerce) instead of Kitchen Street,” and added, “There will be limits to competing on price with ultra-low-priced products from China while operating an offline store.”
Kim Young-ri, Hankyung.com reporter [email protected]
