Supermarket chains use discounts to fight inflation fears

Economy

Published: 03 Sep. 2022, 07:00

Supermarket chains use discounts to fight inflation fears

A customer examines a bucket of tangsuyuk, or sweet and sour pork, at the deli corner at Lotte Mart's Seoul Station branch on Wednesday. [LOTTE MART]

Cheap chicken and pizza have been so popular that large supermarket chains are introducing discounted tangsuyuk, or sweet and sour pork, as they experiment with dramatic price reductions in an inflationary age.

Lotte Mart announced Wednesday it will sell a 650-gram pack of tangsuyuk at the bargain price of 7,800 won ($5.72) to Lotte Point members for a week beginning Thursday.

Considering that the average selling price of tangsuyuk nationwide as of March this year was 15,690 won, according to data from the Korea Agro-Fisheries & Food Trade Corporation, this is close to half the normal price. Lotte Mart's original price was 9,800 won.

“The price reduction was possible because our merchandiser consulted with partner companies and planned in advance and more than three times the usual amount was sold,” said a spokesperson for Lotte Mart.

The sauce for Lotte Mart's tangsuyuk is special and comes on the side. The sauce was developed over several months by Lotte Mart merchandisers and a Chinese cuisine chef who tried restaurants across the country to find the best.

“We decided to expand our range of discounted products to Chinese food including tangsuyuk because the current range of discounted items is insufficient to satisfy customers' wide-ranging tastes,” said the Lotte Mart spokesperson. “We are starting with tangsuyuk because it is one of the most popular Chinese dishes. We will continue to offer a variety of dishes.”

Homeplus kicked off the craze with its 6,990-won fried chicken.

Members of Homeplus's union hold a press conference calling for an increase of personnel in front of the Homeplus headquarters in Gangseo District, western Seoul, on Wednesday. [YONHAP]

First offered on June 30, Homeplus has sold 460,000 buckets in 50 days. Emart and Lotte Mart lowered the prices for their fried chicken temporarily this month, with Emart selling a bucket for 5,980 won, reduced 4,000 won from the original price, and Lotte Mart choosing 8,800 won, reduced 7,000 won.

Discount markets have been offering cheaper pizza as well. For a limited time, Emart sold made-in-the-store pizza for 5,980 won. Homeplus sold their frozen pizza brand for 2,490 won.

Discounted sushi was offered for a limited time at Emart, with a 30-piece set sold for 12,990 won.

The competition among large chains makes sense with inflation running high. Last month, the consumer price index was up 6.3 percent from the same period last year, the greatest increase since November 1998. The increase was even higher in the two months before.

“A large supermarket is where cost-effectiveness is more important than anything else,” said a spokesperson for a large mart. “As high prices continue, price competition to keep customers coming back will continue.”

Discounts also help broaden the customer base. According to Mobile Index, a data analysis service for apps, on Wednesday, the number of Homeplus app users increased steadily after the launch of the discounted chicken, with male users in their 20s and women from 20 to 50 particularly high. Between June 30, when Homeplus launched its discounted chicken, and the end of August, the number of new downloads of the Homeplus app was 246,000, double the usual.

Discounts seem to be good for everyone but the employees of the supermarkets. Homeplus's union said workers are finding it difficult to keep up with demand. At some stores, they're frying five times as many chickens as before — with no increase in personnel.

A customer checks out a display of fried chicken pieces at a CU store. [CU]

Meanwhile, convenience stores have also started chopping prices.

CU announced that from September, fried chicken pieces will be sold on a buy-two-get-one-free basis.

Chicken reduced by 20.2 percent to 7,900 won saw a 248 percent increase in sales compared to the previous year.

BY BAEK IL-HYUN [lim.jeongwon@joongang.co.kr]