Korean Store Owners Protest Supermarkets : Retail: Smaller operations worry that the opening of large ethnic groceries will destroy their businesses.

In the 1930s and 40s, when supermarkets began displacing mom-and-pop grocery stores, there wasn’t much mom and pop could do except go quietly.

But today, as two Los Angeles-based Korean supermarket chains make plans to set up big stores in the San Fernando Valley, the owners of small Korean grocery stores here are fighting back--with everything they’ve got.

“I worry about my life, my broken American dreams,” said Chong T. Park, who has owned the Valley Korean Plaza Market in Van Nuys for five years. “A minority of the Korean community lives in the San Fernando Valley area. If they open a big supermarket, they collect all the customers.”

Next week, the Los Angeles-based California Market--a chain that targets mostly Korean customers--is scheduled to open at the site of a former Alpha-Beta supermarket in North Hills. Next summer, the H. K. Supermarket plans to open in a large store now occupied by a Builders Emporium store in Van Nuys.

The chains plan to serve the approximately 35,000 Valley residents who are of Korean heritage. Now, those residents shop at one of four small- to mid-sized markets in the Valley, or travel to Koreatown to shop at the H. K. and California markets there.

Because large supermarkets buy from wholesalers in huge quantities, they are able to negotiate better prices than the owners of small businesses. These savings are typically passed on to consumers, who eventually abandon smaller, higher-priced stores for the giant competitors.

“We carry ethnic food for a better price than the local markets could,” said Joon Kim, manager of the H. K. Supermarket in Koreatown. When the new stores are open, H. K.--which started as a small store in the mid-1970s and expanded in 1987--will own three markets in Southern California. And California Market--which was founded in 1986--will own five supermarkets.

But, led by the Southern California Korean Grocery Assn., Park and the owners of the Valley’s three other small Korean grocery stores have organized a vigorous--if perhaps ultimately fruitless--campaign against the chains’ incursions into the Valley.

They have bought advertisements in Korean newspapers begging for the sympathy of consumers and supermarket owners. Invoking the memory of the Los Angeles riots, they have said that the big stores will harm local Korean businesses and give the false impression to Latino and black residents that Koreans don’t care about the local community. And the small grocers have distributed unflattering information about the owner of the California Market chain, Richard Rhee.

On Friday, about 30 Korean grocery store owners picketed the California Market in Koreatown, carrying signs emblazoned in Korean and English with such slogans as “Do Not Destroy My Children’s Future” and “Do Fair Business.” Their ranks bolstered by about 20 Latino dayworkers--several of whom said in Spanish that they did not understand the signs they were carrying--picketers chanted in Korean and marched for about an hour.

“Since he opened his California Market there are about 13 small Korean grocery markets have been bankrupt by his money power and his wrongdoing business,” complained J. D. Kim, general director of the grocery association and owner of a store in Downey.

But at an interview at the site of his new store, Rhee--slightly disheveled and constantly interrupted by the ringing of his portable telephone--said he is not concerned about the protests.

His company is large enough, Rhee said, that he can import many products directly from Korea and Japan. On other items, he buys in large enough quantities that he gets good prices from local wholesalers, Rhee said.

Rhee said he also can beat small markets by selling American products alongside Asian ones. He even plans to stock some products aimed at Latino customers.

Rhee admits that some of the charges leveled at him by the grocers association--that he has had trouble with state labor and health department officials--are true, but shrugs them off.

“Everybody has a health department problem, not only California Market,” said Rhee, whose Orange County store was closed for a half-day by health officials earlier this year. “We cleaned it up and fixed what they wanted.”

The supermarkets have another weapon inherent in their size: They can act as anchor stores in Korean or Asian shopping centers, drawing customers to their locations for a wide variety of services. According to Rhee, California Market has purchased the run-down shopping center at Nordhoff and Sepulveda where the new store will open, and has already leased space to a dry cleaners, an aquarium shop and other stores. Rhee is negotiating with an Asian bank he hopes will take over an empty building that once housed a Security Pacific Bank branch.

Similarly, H. K. and its partners--who include the Korean Village development company--is in escrow to purchase the shopping center on Van Nuys Boulevard where its future site will be.

The small stores, meanwhile, are bracing themselves for an onslaught. The Korean community here is so small, they say, that it couldn’t even support the six mom-and-pop stores that were here as recently as last summer, so two of them went out of business this fall.

Because most business leaders--even the owners of the two supermarkets--doubt that the community is strong enough to support both H. K. and California Market, competition between the two big stores is expected to be tough. Surviving as a small grocery will be even harder.

In the end, the small grocers say they understand that the only way to survive will be to offer what the supermarkets can’t: quality service and better products.

“We are going to change our market style,” said Park. “We’re going to sell cheaper and do more purchasing and more investment. We’re going to provide more service to our customers. We’ve got to survive.”

Kook B. Kim, who owns the Midopa Oriental Market in Granada Hills, said he plans to continue to allow customers to buy on credit. And he said he hopes to offer some items at lower prices than the supermarkets, which he charges draw customers with low-priced loss-leaders, only to then charge high prices on other items.

Such changes, argues Joon Kim of H. K. Supermarket, would far better serve the small grocers than staging protests.

“This company started as a small market in Koreatown in Los Angeles,” Joon Kim said. “And unless the small stores expand, they don’t survive the competition. If we didn’t expand to the new markets, we would have been in the same shoes.”