40-year-old office worker A has found himself hesitating at the checkout line more often lately due to rising prices on processed foods, which have significantly increased the grocery burden for his family of four. 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 consumer shopping is changing. Shoppers are increasingly opting for ultra-low-cost PB products at large supermarkets and convenience stores, moving beyond merely cutting expenses.
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 towards relatively cheaper 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 consists of 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 beverages 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 ultra-low-cost products, which are less burdensome on the wallet and frequently repurchased, has surged.
Convenience stores are experiencing similar trends. Sales of GS25's value-oriented PB 'Real Price' grew by 13.1%. Due to recent increases in egg prices, sales of 'Real Fresh Eggs' skyrocketed by 97%. CU's PB sales also rose by 55.4%, with noodle sales increasing by 142.9%, and sales of cereal and dried snacks growing by 68.8% and 60.3%, respectively. A CU representative stated, "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 concentrate on ultra-low-cost items. Lotte Mart has doubled its offerings of PB products priced under 1,000 won from 45 to 90 since last month, expanding the range from fresh foods, beverages, and snacks to include household items. A retail industry official noted, "As consumers increasingly seek value-oriented products due to high inflation, this purchasing behavior is becoming the norm, leading to intensified competition among retailers to attract price-sensitive consumers."
* This article has been translated by AI.
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