40-year-old office worker A has found himself hesitating at the checkout line more often lately, scrutinizing price tags as the cost of processed foods has risen, putting a strain on his family's grocery budget. As a result, A's shopping cart is frequently filled with discounted items and affordable private brand (PB) products.
With consumer price inflation remaining above 3% for two consecutive months, the landscape of grocery shopping is changing. Consumers are not just cutting back on spending; they are increasingly opting for ultra-low-cost PB products at large supermarkets and convenience stores.
According to the National Data Agency, the consumer price inflation rate reached 3.2% in June compared to the same month last year, marking the highest level in two and a half years since December 2023. This is a 0.1 percentage point increase from May's rate of 3.1%, with food and non-alcoholic beverage prices rising by 2.0% during the same period.
Starting at the end of this month, major food companies will begin raising prices. Tous Les Jours will increase the prices of 76 items, including bread and egg toast, by an average of 8.2% starting July 31. Nongshim and CJ CheilJedang will also raise prices on some products, including ramen and grilled fish, by an average of 5.8% and 8%, respectively.
As consumers feel the pinch of rising food prices, there is a noticeable shift toward more affordable PB products. Sales of E-Mart's ultra-low-cost PB line, '5K Price,' increased by about 4% from the previous month during the first 25 days of July. This line primarily features items priced under 5,000 won. Additionally, sales of ready-to-eat rice, including white rice and mixed grain rice, surged by 35%, while sales of cold brew and low-sugar vanilla cream cold brew drinks jumped by 88%.
Lotte Mart also reported that sales of PB products priced under 1,000 won increased by over 20% compared to the same period last year. Among these, sales of the PB 'Today Good' white rice rose by 69%. The demand for low-cost products, which are less burdensome on consumers and often purchased repeatedly, has surged.
Convenience stores are experiencing similar trends. Sales of GS25's value-oriented PB 'Real Price' grew by 13.1%. Due to rising egg prices, sales of 'Real Fresh Eggs' skyrocketed by 97%. CU's PB sales also increased by 55.4%, with noodle sales soaring by 142.9%, and sales of cereal and dried snacks rising by 68.8% and 60.3%, respectively. A CU representative noted, "We have introduced three types of PBICK pasta at a price of 5,500 won, which is cheaper than specialty stores, and it has gained significant popularity among consumers."
Retailers anticipate that as high inflation persists, demand for PB products will continue to grow, prompting them to expand their ultra-low-cost offerings. Lotte Mart has doubled its selection of PB products priced under 1,000 won from 45 to 90 in the past month, broadening its range from fresh foods, beverages, and snacks to include household items. A retail industry official stated, "As consumers increasingly seek value-oriented products due to high inflation, this trend is becoming a regular purchasing behavior, leading to intensified competition among retailers to attract price-sensitive shoppers."
* This article has been translated by AI.
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