"Introducing Always Lowest Prices and Activating TF" Large Mart Declares 'War on Inflation' (Comprehensive)

Emart selects 40 essential products for 'Always Lowest Price' on the 4th
"Cheaper than major marts H·L and online C"
Lotte Mart activates price stabilization TF... Strengthens price management team role
Focuses on managing 500 essential items in top 30% sales
Homeplus makes 'Price Stabilization Project' year-round
Sales effect including 25% increase in online orders

Customers are shopping at a large supermarket in Seoul on the 3rd, as vegetable prices surge due to the recent heavy rains and the monsoon season. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yuri Kim] Large discount stores are taking active measures to reduce the burden on shoppers amid soaring prices by introducing a 'permanent lowest price' system and operating a price stabilization task force (TF).

According to the distribution industry on the 4th, Emart announced that it will launch the 'End of Price' project to ease the burden of national living expenses. The goal is to maintain the lowest daily prices compared to large discount stores H and L and large online mall C, instilling the perception that "shopping at Emart is the cheapest and definitely beneficial."

The first phase of Emart's 'permanent lowest price' initiative, which involves price reductions on 40 essential items, will be implemented equally both online and offline at Emart stores and SSG.com Emart Mall (based on store delivery products). Emart selects essential product groups frequently consumed and used daily and supplies representative products in each category at the industry's lowest prices. These products are sold cheaper than those at other large discount stores (H and L online mall prices) and large online malls (C company rocket delivery prices). Emart plans to maintain the permanent lowest price by conducting daily price monitoring and implementing additional price cuts.

The 40 essential items consist of 17 processed foods such as milk and kimchi, 7 fresh foods such as eggs and onions, and 16 daily necessities such as toilet paper and soap. Emart stated, "We will maintain the lowest prices by purchasing major products in bulk and diversifying sourcing regions," adding, "We will expand the lowest price policy by the end of the year and extend the period if the high-price situation does not ease."

Separately from the 40 items, Emart selects 500 products for weekly lowest price management. They also plan to reduce prices on representative products with high seasonal sales. Starting July 14, every two weeks, they will select the top 10 products with rapidly rising prices among high-demand items and lower their prices to the lowest level. Kang Hee-seok, CEO of Emart, said, "We are launching the 'End of Price' project to ease the burden on customers worried about high prices," and added, "Through continuous lowest price management, we will clearly convey the message that 'at Emart, you can buy essential products like kimchi and eggs at the cheapest prices.'"

Lotte Mart has also operated a 'Price Stabilization TF' directly under CEO Kang Sung-hyun since March and started running a pricing team. The pricing team focuses on price management to ensure customers receive real price benefits through reasonable consumer prices and price analysis based on product characteristics.

They especially focus on managing about 500 essential daily items that make up the top 30% of sales by category. Lotte Mart explained, "The purpose is to contribute to household price stability by defending prices of products sensitive to daily life, from fresh and processed foods to kitchenware," adding, "We evaluate price levels every Thursday or in real-time as needed to adjust prices or find alternatives."

Lotte Mart emphasized, "We prepare alternatives such as diversifying sourcing regions and import countries and changing specifications by preemptively catching products expected to have price increases due to environmental changes." A representative product that received positive market responses by preparing substitutes through price forecasting is 'Canadian pork.' Lotte Mart's MD anticipated that domestic pork belly prices would exceed 4,000 KRW per 100g around May and secured about three times the volume compared to last year through relay negotiations with Canadian suppliers since early this year.

They are also striving to stabilize selling prices through unconventional ideas that break the framework of large discount store products. For example, by commercializing blueberries smaller than the usual 14mm size standard for large discount stores, they offer products about 40% cheaper than regular products. Similarly, they provide about 20 types of fruits and vegetables that are slightly smaller or have minor blemishes but have no difference in taste or nutrition compared to regular produce at reasonable prices.

Homeplus has also been operating a 'Price Stabilization Project' year-round since January. A Homeplus official said, "We are responding to price increases and reducing customers' shopping basket burdens by offering major products with high demand such as food and daily necessities at optimal prices," adding, "Since launching the Price Stabilization Project on January 13 until the 12th of last month, Homeplus online orders increased by about 25%, showing actual sales effects."