SMALL BUSINESSES' CONCERNS CONTINUE

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Compensations provided to small businesses for pandemic losses on Monday are expected to bring them some financial relief during these tough times. They are seeing more customers and higher sales lately, but their woes are not over yet.

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This restaurant located in a college town is seeing a surge in customers lately. The owner and her son are making more now, and they don't need to worry about labor cost because they do everything themselves. What really concerns them is the rising cost of food ingredients. They could not afford to replace their old air conditioner as the weather was getting hotter by the day. They barely managed to get a new one with the help from the local district office.

[Soundbite] Sung Jin-min(Restaurant owner) : "Food prices have soared, but we can't raise our prices because we're located near a college campus. We're just going to manage as long as we can."

This barbecue place is seeing its sales grow these days, as more customers come in large groups to have dinner. However, it's too early to be rest assured, as food prices and labor costs keep soaring. Unwilling to burden its customers, this place is hesitant to raise its own prices to cope with inflation. Instead it has decided to cut down its business hours to save on labor cost.

[Soundbite] Ahn Byung-man(Restaurant owner) : "We used to stay open until midnight, but now we close at 10 p.m. We used to have four to five staff members, but only three are left now."

Surging prices and labor costs are the new challenges that small businesses are facing these days. Last month, consumer prices rose in the higher 4-percent range, recording the highest spike in 13 and a half years. Food prices were up 5.4 percent. Credit card use increased significantly at bars and singing rooms, but remained virtually the same at restaurants and cafes. The use of credit cards at internet cafes increased by more than 30 percent, but their sales remained largely unchanged because their owners could not hire staff to sell food during night shifts.

[Soundbite] Kim Ki-hong(Internet cafe owner) : "I'm operating my place as an unmanned cafe. We can't use our kitchen because we're understaffed."

Experts say in addition to financial support, small businesses also need help in terms of labor costs and hiring.

[Soundbite] Kim Jong-jin(Korea Labor and Society Institute) : "The government should provide support in terms of hiring to businesses whose sales are declining or fall below a certain amount."

Experts are also calling for measures to stimulate consumption, such as the introduction of vacation vouchers and regional currencies.