Nearly all businesses are suffering from the economic fallout from the COVID-19 outbreak, but mom and pop businesses are feeling the biggest pinch in South Korea with their sales and profit nearly halved in February and March, a survey found on Wednesday.

Six out of 10 small businesses responded their business could not last for more than half a year under the current situation, demanding tax cuts and other supporting measures to survive through the virus shutdown, according to the results of the survey released by Korea Economic Research Institute (KERI).

The survey was conducted by pollster Research and Research on furniture stores, fruit shops, restaurants and others in 24 neighbor business sectors, 32 business associations and cooperatives nationwide from March 18 to 23.

Apparel businesses are forecast to be hardest hit with an 85 percent drop in February and March sales from a year ago. Furniture businesses are also feared to experience an 80 percent decline. In contrast, courier services are expected to see a 5 percent sales increase over the same period as local consumers flock to online shopping to avoid the COVID-19 infection.

Neighborhood businesses are in a more distressed condition in terms of profitability. None in the surveyed 24 business sectors predicted their net profit would increase. Retail businesses expected their net profit would plunge by 95 percent, the largest drop among the business sectors, followed by apparel and furniture businesses, gold dealers, rice cake stores, and chauffeur services.

As expected, COVID-19 was cited as the main cause of the decrease in sales and net profit. Over 90 percent of all respondents, including multiple answers, blamed slumping sales on a customer decrease in addition to economic contraction. The second most common reason was a labor cost hike.

Business owners cited tax cuts and an extension of tax payment deadlines as the most urgent measures to minimize damage to their business. Nearly 60 percent chose this measure.

With the prospect that sales and net profits would be cut in half, six out of 10 businesses said it would be difficult to endure the slump for more than six months. Only 37 percent of respondents said they could last more than six months.

There were also many voices cautioning against a planned minimum wage increase next year amid a rapid economic recession. Some 58 percent of respondents claimed the minimum wage for next year should be frozen, while 26 percent demanded a cut.

By Song Min-geun and Minu Kim

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