In High Inflation, Distribution Industry Says "Let's Attract Customers with Cost-Effective Food"

Shinsegae Group's Major Affiliates Present Burgers Priced in 2000 Won Range and Chicken in 5000 Won Range at 'SSG Day'
Hot Deals Like Half-Price Samgyeopsal Also Popular at Lotte Mart
Consumer Price Index Shows Significant Increase in Fresh Fruit and Vegetable Prices
NS Home Shopping Expands Broadcasts Featuring Imperfect Products

As the impact of high inflation centered on food prices continues, the distribution industry is attracting customers with cost-effective products.

On the 13th, a 'Starbucks Happy Hour' notice was displayed at a Starbucks store in Gangnam-gu, Seoul. Starbucks Korea is offering a tall-sized Cafe Americano for 3,000 won from 2 PM to 5 PM for three hours starting from this day until the 16th in celebration of Shinsegae Group's shopping festival, SSG Day. [Image source=Yonhap News]

According to the industry on the 14th, Shinsegae Group has been holding its biggest annual discount event, 'SSG Day,' with participation from 20 major affiliates since the previous day. This year's SSG Day is characterized as an event focused on 'cost-effective food' targeting consumers whose spending sentiment has been significantly dampened by high inflation. By affiliate, E-Mart offers chicken priced in the 5,000 won range, No Brand Burger offers burgers in the 2,000 won range, and E-Mart24 presents lunch boxes in the 3,000 won range. Starbucks sells Americano for 3,000 won.

From the 2nd to the 12th, the 'Lotte Red Festival,' involving 11 Lotte Group affiliates, also succeeded in attracting consumers with food discounts aimed at reducing the burden caused by prolonged high inflation. In particular, Lotte Mart's 'half-price pork belly' and 'half-price king crab' introduced during this Red Festival reportedly sold out early at some stores, and even the additional stock secured was completely sold out.

Online, 11st set new shopping records during its biggest annual event, the 'Grand 11th Day,' by emphasizing cost-effective food products. Among these, 11st's next-day delivery service 'Shooting Delivery,' which focuses on cost-effective products, saw transaction amounts increase by 40% compared to the same period last year. Especially, purchases of large-quantity food items continued, resulting in high sales of water, beverages, and instant rice.

From the 2nd to the 11th, during the Lotte Red Festival, consumers are browsing pork belly at the meat section of Lotte Mart Zeta Plex Seoul Station branch located in Bongnae-dong, Jung-gu, Seoul.
[Photo by Lotte Shopping]

The ongoing discount competition featuring cost-effective products both online and offline is due to consumers opening their wallets only for low-priced or essential daily products amid the persistent high inflation situation. According to Statistics Korea, the Consumer Price Index last month recorded 113.37 (2020=100), meaning the expected cost of purchasing goods of the same quality as in 2020 rose by 13.37%.

This figure increased by 3.8% compared to the same month last year, with food-related items such as groceries and meals showing a rise of around 5-6%. Among these, fresh fruits jumped 26.2%, marking the largest increase in 12 years and 9 months since January 2011 (31.9%). As fruit prices surged, distribution companies are expanding sales of 'ugly fruits,' which are considered cost-effective products.

NS Home Shopping plans to expand its broadcasts selling ugly agricultural and marine products, showcasing 5 to 6 items weekly. Previously, NS Home Shopping sold 748 tons and 7.23 billion won worth of ugly agricultural and marine products over two months from September to October. The products sold during these two months were heavily weighted toward fruits, including 587 tons of apples and 40 tons of pears.