Big-store competition good deal for consumers

A survey by the Korea Economic Research Institute found that districts with large discount chains enjoy lower prices for 30 everyday necessities compared to those with fewer or no chains.

The results highlight a benefit of big discount stores at a time when the government continues to push regulations on big retail players to protect mom and pop vendors.

The study tracked grocery and household items from Seoul’s 25 districts from 2011 to 2014.

The items that were tracked included ramen, flour, coffee, soy sauce and diapers.

Jungnang District in northern Seoul and Gangseo District in western Seoul each has five large discount stores and enjoyed the lowest prices for a basket of goods in the study of 170,817 won ($155.10) last year.

Jongno and Seodaemun districts, which have no big retail stores, showed the highest basket price.

Over the course of the study, Jongno had the second highest and Seodaemun the fifth highest prices. Gangseo District, on the other hand, had the second lowest average prices.

The institute said stiff competition among big supermarkets results in pushing down average prices of goods.

“It is obvious that large discount supermarkets contribute to lowering price levels of different items. So it has positive effects for consumers,” said Chung Hoe-sang of the Korea Economic Research Institute, who conducted the study.

The researcher also encouraged the government to change restrictive laws and regulations.

“[The government] needs to ease regulations on big discount retailers because they actually bring benefits to consumers,” he continued.

“Retail law should put the interests of consumers first, but current law runs counter to the interests of consumers.”

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]