Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Retailers rushing to cut prices on consumption slump
Models promote abalones at E-mart's Yongsan branch in Seoul, Thursday. The discount chain store said it offers discounts for groceries and household items during the first and third week of each month. / Yonhap
By Baek Byung-yeul
By Baek Byung-yeul
Discount stores and other retailers are rushing to implement an “unprecedented” low-pricing strategy to attract more shoppers as the consumption slump continues to deepen, company officials said Sunday.
Some franchised restaurants and other food service establishments, which have been struggling to deal with increasingly price-sensitive consumers amid rising labor costs, have also cut their prices drastically to stay afloat.
Local discount store chain E-mart said Thursday it began offering groceries and household items at reduced prices.
The discount chain of Shinsegae Group chose abalone as the first item of its new price policy, selling one small abalone at 990 won ($0.88), down 50 percent from the previous 1,980 won.
The firm said the discount program is available the first and third week of each month and three items will be on sale at a discount of between 40 percent to 50 percent.
The super-low pricing strategy came after a remark from Shinsegae Group Vice Chairman Chung Yong-jin who spoke of the importance of targeting the low-end market.
During his New Year address on Wednesday, the vice chairman predicted that groceries and household items market will be divided into super low-end and premium as customers become smarter. He also stressed that E-mart should focus more on taking shares from the super low-end market.
E-mart, which has been operating 157 discount stores nationwide, said it has prepared for six months before launching the discount program.
“By reducing distribution costs we could come up with such a low price,” an E-mart official said. “To use abalone for example, we could lower the price to 990 won because our seafood buyers made a direct deal with local abalone farm operators last summer.”
Abalone is a popular dish here, offering a good source for protein while being low in fat. As many people have refrained from purchasing it due to its relatively high price, E-mart chose the seafood as its first item for the discount program. Also on sale are pork belly, one of the most popular cuts of meat in Korea, and eggs.
The sharply rising minimum wage also made local restaurant franchises implement discount promotions.
Season's Table, a buffet franchise selling Korean cuisine, is running a special promotion program to draw more customers.
The Korean food franchise, operated by CJ Foodville, shut down 11 locations as of Dec. 31, mainly due to increasing minimum wage and rental cost. Korea's minimum wage for 2019 jumped to 8,350 won, up 10.9 percent year-on-year.
As 11 stores were shut down, Season's Table currently offers 50 percent discounts to customers who take a photo in front of a shut down restaurant, and show it at an open Season's Table restaurant.
Also for students who are on winter vacation, the restaurant franchise is offering special discounts until Feb. 28. While it costs 14,900 won during lunch on weekdays and 23,900 won during dinner on weekends, students can pay discounted prices of 12,900 won and 18,900 won respectively.
To celebrate the New Year, customers who bring an elementary school student and a preschool child to VIPS, CJ Foodville's Western-style family restaurant franchise, or Season's Table can use the salad bar for only 2,019 won until Feb. 17.
Hansot, a local lunchbox chain, is also gaining attention for its weekly discount program. For the month of January, Hansot is offering discount on different items each day. For instance, Chicken Mayo, one of the most popular lunchboxes of the franchise, will be discounted from 2,900 won to 2,400 won on Mondays.