Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Rising prices impact Chuseok gift sales
Packaged pears are put in boxes for Chuseok gift sets at a farm in Incheon, Tuesday. Yonhap
By Yi Whan-woo
The sales campaign for Chuseok gifts this year is being impacted by inflation, as consumers continue to face high living costs despite consumer prices easing to 2 percent in August, the lowest level in nearly three and a half years.
Korea Consumer Agency (KCA) said Wednesday that 54.3 percent of the 895 Chuseok gift sets it surveyed were priced between 10,000 won and 40,000 won ($29.80).
The gift sets varied from canned food, such as ham and tuna, to hygiene products such as shampoo and toothpaste, alcoholic beverages and dietary supplements.
The supply of gift sets in this price range increased by 7.5 percent compared to the previous year, according to the KCA.
In particular, at discount store chains nationwide, the supply of gift sets in this price range increased by 10.5 percent year-on-year.
“The findings show consumers are burdened by inflation, although it has been moderating, and they are looking for relatively low-priced gifts compared to a year earlier,” the KCA said, noting that inflation decelerated for the fifth consecutive month as of August.
The KCS also noted that "shrinkflation" was observed in the sales of several gift sets.
“Shrinkflation” refers to a sales strategy where the size or quantity of a product is reduced while the price remains the same, aimed at maximizing profits amid rising production costs.
For example, the price of a set of cooking oil remained the same as last year, but its size decreased from 600 grams to 500 grams.
Furthermore, prices of some gift sets were hiked while their size shrank, according to the KCS.
The prices of gift sets also varied between discount store chains and department stores. More than 90 percent of the products were offered at a lower price at discount store chains than at department stores.
“We urge consumers to closely compare prices when purchasing the products,” the KCS said.