Surging food prices, housing costs exacerbate burden on consumers

A shopper walks past the fruit section of a retail chain in Seoul, Oct. 15. Newsis

Kim Soo-jin, 41, mother of two, said she feels grocery shopping is increasingly becoming stressful for her.

“I find myself worrying about how I’m going to make meals with all [of the] ingredient prices [being] so high,” she said. “A pack of fried chicken used to be 8,000 won ($5.6), now it’s well over 12,000 won. Fruits and vegetables are so expensive now. I spend well over 200,000 won for a week to feed my family."

Park Sang-woo, 33, an office worker, shares a similar sentiment. He lives in a studio apartment in Gangseo District, western Seoul.

“My monthly rent hasn’t changed, but utility fees are higher. Electricity, gas and everything else,” he said. “I remember the monthly management fees I paid to the apartment operator used to be under 150,000 won, but now it is close to 200,000 won. This is something I can’t cut back on. So I have to spend less on other things such as clothing, which seem to be getting more expensive.”

They are among many who feel that the cost of living — including housing, food and clothing — has been rising at a pace that outstrips the overall consumer inflation rate over the past five years.

According to a survey by the Korea Economic Research Institute, the cost of essential daily necessities and services — including housing, food and clothing — increased by an average of 4.6 percent annually between 2019 and 2024.

This is 1.8 percentage points higher than the average increase in the overall consumer price index, which stood at 2.8 percent during the same period.

Housing costs rose at the fastest pace, averaging 5.5 percent per year, followed by food costs at 4.6 percent.

Electricity and gas bills, tied closely to energy import prices, rose 7 percent annually, driven by global energy shocks including Russia's invasion of Ukraine.

Food price increases are attributed to rising global agricultural produce prices, higher distribution, logistics and labor costs, as well as supply shortages caused by climate change.

The report said the public’s perception of inflation is far greater than the official inflation statistics.

The gap between the two can seem especially wide for lower-income households, whose spending on daily necessities takes up a large portion of their monthly income, the report added.

“More consumers feel the pinch of inflation because the prices of everything they buy every day rise faster and stay higher,” the report said.

The report said digitizing the clothing industry, for example, can rein in essential living costs by reducing inventory waste.

As for agricultural produce prices, establishing government subsidy systems to offset higher imported food prices can have the same effect, it said. “The government can increase subsidies for grain farmers, for example, to absorb global price shocks."

Replacing fluorescent lighting with LEDs for improved energy efficiency in apartments can lower energy costs, the report added. LED, short for light-emitting diode, is a semiconductor device that emits light when an electric current passes through it.