Convenience stores join move to lower food product prices

A woman shops at a CU convenience store in Seoul. Courtesy of BGF Retail

By Lee Kyung-min

Local convenience stores are either lowering product prices or withdrawing plans to raise them, according to market watchers, prodded by similar moves taken by confectionery, bakery and snack makers.

The price adjustments were prompted by a government recommendation that makers of the country's most popular food items should contribute to easing the financial burden on households struggling due to soaring living costs.

Convenience stores have lowered the prices of private brand (PB) products, including milk and ice cream. PB products are goods produced by a manufacturer for exclusive sale under a retailer's brand and are available only at proprietary stores.

CU, a convenience store chain, was first to lower the price of three snacks and two types of milk.

The prices of these products will be lowered by 100 won ($0.08) from July 1.

CU said the lowering of the retail price despite wholesale price increases reflects its efforts to ease the burden on product suppliers.

“We are aware that our small and medium-sized supply partners are grappling with sharp production cost increases,” a CU official said. “We decided to share the burden, not only with our business partners, but with the consumers.”

E-Mart 24, another convenience store chain, said it will not raise the prices of bottled water, coffee and milk.

Convenience stores said they will not increase the price of ice cream supplied by Lotte Wellfood, formerly Lotte Confectionery.

The announcement came despite the Lotte affiliate pushing ahead with a price increase of at least 25 percent for 15 of its frozen confectionery products starting July 1.

On Tuesday, Nongshim, a local food and snack manufacturer, lowered the prices of its key snacks and instant noodles.

Two days later, SPC Group and CJ Foodville, the country's two leading bakery operators, said they will lower prices of baked products and other popular items.

Bank of Korea data showed Korea's Composite Consumer Sentiment Index (CCSI) in June inched up to 100.7, up 2.7 percentage points from the month before.

The fourth consecutive month of increase exceeded the psychologically significant 100 level for the first time in 13 months.

However, inflation expectations stood at 3.5 percent in June, unchanged from the month before, despite inflation standing at 3.3 percent in May, down from 3.7 percent in April.

This means a large number of consumers still believe that the current cost of goods and services is too high and those prices are likely to increase in the months to come.


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