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Preston Draper, country manager of Costco Wholesale Korea, said on November 15 that he has no plans of apologizing for Costco Korea’s opening on Sunday. The Korean government has forced hundreds of Conglomerate-owned retailer stores, including Costco, across the country to close once every other Sunday. This law is aimed at protecting the traditional Korean markets and small retailers, which have lost customers to retail giants over the years, by preventing Conglomerate-owned retailers from dominating the market.
The Korean unit of the U.S. chain has been operating its stores despite a $27,000 (a 30 million won) fine imposed by three Seoul district offices for ignoring the city ordinance.
Draper, who attended to the City Council of Seoul’s Finance and Economy Committee, said that Costco did not take any action when the Korean government made the decision in April that required large retailers to close every other Sunday because it respected the Korean law.
He added that Costco had started operating its stores on Sundays because of their relationship with subcontractors and customers. On Seoul city’s crackdown on Costco held on October 10 and 14, he said that Costco Korea has tried its best to cooperate with Seoul and to follow city’s ordinances.
The battle between the American wholesaler and the Seoul Metropolitan Government and district offices started in September when Costco sent a letter to the Seoul government saying that it will open every Sunday. The giant wholesale said the decision is legitimate because the city ordinance was ruled illegal by the court.
Following Costco Korea’s movement, other Korean retail giants ― E-mart, Lotte Mart and Home plus ― filed lawsuits against the regulation. The courts allowed these stores to operate until legal ordinances were promulgated.
After the court decision, the three major competitors to Costco resumed Sunday operations, and Costco’s three stores in Seoul and five in other cities did as well.
However, Seoul city has argued that Costco cannot operate its stores like its three rivals without joining the lawsuit. Draper controverted that Costco Korea is also guaranteed to enjoy what other rivals do based on Korea’s constitutional law, which offers equal rights to everyone.
On September 12, Seoul’s Jungnang, Seocho and Yeongdeungpo ward offices imposed a combined $27,000 (30 million won) fine on the wholesaler’s three stores that opened on Sunday.
Costco released a statement shortly after saying, “Just because we did not take part in the lawsuits, barring us from opening stores on Sundays is unfair. Court rulings should be applied to all retailers.’’