CU's 'Nollaun Ganpyeonsik' and GS25's 'Hyejabrandeu' Lead Sales Surge with High Cost-Effectiveness Amid High Inflation
The domestic convenience store industry is gaining popularity by continuously launching ultra-low-priced products in response to the high inflation era.
According to the distribution industry on the 9th, CU, a convenience store operated by BGF Retail, launched two ultra-low-priced snacks priced at 990 won the day before. The two new products released by CU this time are '990 Spicy Nacho Chips' and '990 Cheddar Cheese Balls,' emphasizing the price of 990 won in the product name. These products increased the volume by about 20% compared to market snack products with a maximum capacity of 75g, while lowering the price by about 30%.
The model is posing while holding the newly released Hyejaroun Jipbap Wang Donkatsu lunchbox from GS25. [Photo by GS Retail]
CU has been releasing ultra-low-priced products one after another this year. Following the launch of the 1,000 won Spicy Fish Cake Triangle Kimbap in January, it introduced the 880 won cup noodle '880 Yukgaejang Ramen' in February. Earlier this year, CU launched the ultra-low-priced convenience food line called 'Amazing Convenience Food' brand and offered affordable convenience foods such as salads and rice bowls in addition to triangle kimbap.
GS25, operated by GS Retail, is also capturing consumers seeking cost-effectiveness by reintroducing the Kim Hye-ja brand, a cost-effective convenience food series. The Hye-ja brand is a representative brand launched by GS25 using the name of actress Kim Hye-ja and has attracted attention for its high cost-effectiveness. GS25 reintroduced the Hye-ja brand convenience food by launching the 'Hye-ja Home-cooked Spicy Pork Stir-fry Lunchbox' in February last year. The Hye-ja brand convenience food expanded its menu composition beyond lunchboxes to include kimbap, rice balls, and bread. GS25 plans to conduct promotions along with the development of casual menus for the Hye-ja brand in the future.
Ultra-low-priced cost-effective products at convenience stores are selling like hotcakes amid high inflation. CU's '880 Yukgaejang Ramen' surpassed 400,000 cumulative sales about two months after its launch, and the 1,000 won product 'Spicy Fish Cake Triangle Kimbap' also sold more than 500,000 units cumulatively within three months of release. GS25's Hye-ja brand convenience foods have sold more than 30 million units since their launch in February last year. The Hye-ja brand convenience foods mainly sold lunchboxes, with products such as ▲Tongtong Soya Bulgogi (5,000 won) ▲Neobi Ani Dakgangjeong (5,200 won) ▲Tofu Kimchi Spicy Pork (4,900 won) ranking high in sales.
The popularity of ultra-low-priced convenience store products continues in product categories other than convenience foods. CU's 'Deuktem Series,' an ultra-special price private brand (PB) launched in 2021, offers about 30 products including ramen, eggs, kimchi, tissues, and instant rice at reasonable prices, surpassing 30 million cumulative sales by the end of March. GS25 has also been selling 'Real Price,' a cost-effective PB for price stabilization, since August last year. GS25 explained that Real Price's sales in the recent two months (March-April) increased about 16 times compared to the initial two months after its launch (August-September last year).
Convenience store cost-effective products are selling like hotcakes as the number of consumers valuing cost-effectiveness has increased due to high inflation, and demand to have a meal at convenience stores instead of dining out has combined. The accessibility of convenience stores and the ease of purchase are also considered factors influencing this trend.
These ultra-low-priced products also boost sales at convenience store franchises. According to GS25's customer trend analysis team, which analyzed sales data excluding cigarettes in January, the average purchase price of customers buying Hye-ja brand convenience foods was about 26.3% higher than the average purchase price. This means that customers who purchase Hye-ja brand products tend to spend relatively more on other products as well. The repurchase rate of 'Hye-ja Lunchbox' was also high at 38.6% compared to other products, indicating that customers who buy this product visit frequently, GS25 explained.
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