[News Terms] Chicken Radish 500 Won... Silently Rising 'Stealthflation'

Chicken and Pizza Were Free When Ordered Together
Ultimately Leading to Chicken Price Increase Effect

Pizza pickles 300 won. Chicken radish 500 won. Consumers who went to a large supermarket to buy half-price chicken or half-price pizza have probably hesitated at least once over whether to purchase additional chicken radish and pickles. Until now, these were services that came free of charge when ordering chicken or pizza, but now it has become common to pay extra for additional purchases. Although the cost is not officially included in the price of chicken, from the consumer's perspective, every time they buy an extra chicken radish for 500 won, the effective price of the chicken increases by 500 won. This kind of quiet price increase, which is not captured in the price index, is called "Stealthflation."

Stealthflation is a compound word of "Stealth" and "Inflation," referring to a situation where prices quietly rise in a way that is not captured by consumer price indices or producer price indices, weakening consumers' purchasing power, much like a stealth aircraft that cannot be detected by radar. Unlike shrinkflation, which reduces the quantity of a product while keeping the price the same, or skimpflation, which lowers the quality of a product, stealthflation involves an increase in the price of additional services provided while keeping the product's quantity and quality unchanged. However, stealthflation shares similarities with shrinkflation and skimpflation in that it quietly raises prices and ultimately leads to increased consumer burden. The term stealthflation emerged after the 2008 financial crisis and is known to have been first used by British economist Tim Harford.

The British Economist predicted that stealthflation would intensify this year. As prolonged high inflation increases consumer fatigue, companies are expected to adopt new cost-charging strategies like stealthflation. According to the United Nations, the global inflation rate, which was 8.1% in 2022, is estimated to have decreased to 5.7% in 2023, but the trend of high inflation continues. The global inflation rate this year is also expected to remain high at 3.9%, sustaining a high inflation environment in the 3% range.