Rising Prices Double Discount Events... Increasing Burden of Lunar New Year Shopping

Rising Prices of Rice and Onions Since Early Year
AI and Cold Wave Impact... Increased Stay-at-Home Demand
Concerns Over Sharp Price Surge Ahead of Lunar New Year

Government Supports Agricultural, Livestock, and Fishery Consumption Coupons
105.6 Billion KRW Funding... 1.76 Times Last Year
20% Discount at Large Supermarkets
Expanded Participating Companies... Expected Price Stabilization

[Asia Economy Reporter Cha Min-young] As prices of agricultural, livestock, and marine products have sharply risen since the beginning of the year, it is expected to affect the Lunar New Year inflation as well. In response, the government is expanding related discount events more than twofold. The number of distribution companies available to consumers will also be significantly increased, raising hopes that this will help stabilize prices.

Rice, Eggs, Pork Belly↑... Sharp Price Surge at the Start of the Year

According to the Korea Agro-Fisheries & Food Trade Corporation on the 13th, the retail price of 20kg of rice was 59,733 won, up 15.3% and 29.9% compared to last year (51,790 won) and the average year (45,986 won), respectively. Onion prices rose 58.1% compared to last year, pork belly increased by 25%, and eggs surged by 15%. Prices of marine products also continued to rise, with mackerel increasing by 6.7%, among others.

According to Statistics Korea, the price index for agricultural, livestock, and marine products in December last year jumped 9.7% compared to the same month the previous year. Due to the continued home-cooked meal trend caused by social distancing, demand remains high, but supply is unstable due to avian influenza (AI) outbreaks and cold waves. In some regions, the retail price for a carton of eggs has exceeded 7,000 won, making the actual consumer-perceived inflation even higher. A distribution industry official explained, "Wholesale prices have surged sharply, continuously affecting retail prices," adding, "There is a high possibility that fresh food prices will spike around the Lunar New Year holiday."

This Year’s Agricultural, Livestock, and Marine Product Support Budget Doubled

Inside view of a large supermarket.

The government is taking direct support measures by issuing consumption coupons for agricultural, livestock, and marine products ahead of the Lunar New Year. The budget for promoting consumption of domestic fresh and processed foods increased 1.76 times from 60 billion won last year to 105.6 billion won this year. The Ministry of Agriculture, Food and Rural Affairs’ budget rose from about 40 billion won last year to around 76 billion won, while the Ministry of Oceans and Fisheries’ budget for the marine product promotion increased from 20 billion won to 29.6 billion won. The marine product promotion will be held eight times, with common discount items for the Lunar New Year event including yellow corvina, dried yellow corvina, anchovies, eel, and red sea bream.

The participating distribution companies have also diversified. Last year, a total of 14 companies participated, including offline large marts and online malls, and traditional markets and small-to-medium marts were linked with Seoul’s ‘Zero Pay’ system. This year, eco-friendly stores, local food direct stores, traditional markets, and small-to-medium marts were selected through a prior application process and allocated support budgets directly. The Ministry of Oceans and Fisheries plans to recruit marine product-related startup companies and consumer cooperatives for large marts and shopping malls. Participating companies will be confirmed and announced next week.

20% Discount When Using Large Marts

Consumers can receive an immediate 20% discount at checkout when using large marts equipped with a Point of Sale (POS) system. When shopping online, a pre-discount coupon of 2,000 won per 10,000 won spent is provided. The total discount amount per person is 10,000 won.

Expectations are high in the distribution industry as a big market opens. It is anticipated that the three major marts?Emart, Homeplus, and Lotte Mart?as well as most major online malls such as GS Retail, Naver, Market Kurly, and Oasis Market will participate. A distribution industry official said, "Expanding direct support targets will greatly help small and medium-sized distribution companies," adding, "It is expected to contribute to stabilizing the recently soaring prices by effectively lowering real prices by about 20%."