Home > Business > Industry

Retailers drastically slash prices to boost sales amid inflation-fueled spending drought

Published: 23 Jun. 2025, 18:06 Updated: 23 Jun. 2025, 18:20

Customers buy ramyeon at a supermarket in Seoul on June 23. [NEWS1]

Retailers are rolling out ultra-low-priced products as inflation-weary consumers keep their wallets closed. The strategy, known as “small margin, high volume,” aims to boost overall sales by offering essential items at rock-bottom prices.

Lotte Mart and Lotte Super began selling 14-inch electric fans for 19,900 won ($14) on June 5, limited to 1,500 units. According to Lotte Mart, this is the first time in 25 years that it has offered a fan priced in the 10,000-won range, nearly 50 percent cheaper than the average market price.

Emart recently launched a budget whiskey named “Just for Highball,” marketed as a base liquor specifically for highball cocktails. Priced at 5,980 won per bottle, Emart says it is one of the cheapest whiskeys made from original spirit currently on the market.

Massive discount events are also proving popular. During the first round of its “Lotte Red Festival” from June 5 to 15, Lotte Mart offered premium Korean beef and watermelons at half price. Sales jumped 120 percent and 70 percent, respectively, compared to the same period last year.

In the second week of the festival, held from June 12 to 18, Lotte Mart introduced beef priced at 990 won per 100 grams (3.5 ounces) for customers using a partner credit card, along with steeply discounted watermelons, eggs and even king crab, the latter of which priced in the 3,000-won range.

“Some of our daily specials were so popular they caused ‘open-run’ scenes,” a Lotte Mart official said, referring to queues forming well before store opening hours.

The discount blitz reflects retailers’ response to sluggish domestic demand and high inflation. According to Statistics Korea, the consumer price index stood at 116.27 in May — up 1.9 percent from a year earlier. The standard for the index is set at 100 for 2020.

Although inflation returned to the 1-percent range, easing from the 2.0 to 2.2 percent range in the first four months of the year, the prices of processed foods and dining out rose by 4.1 percent and 3.2 percent, respectively, keeping pressure on household budgets.

It seems to have reflected retail sales of food and beverages shrinking annually since a 2.5 percent decline in 2022, according to recent data from the Korean Statistical Information Service. In the first quarter of this year, sales fell another 0.3 percent year-on-year. Restaurant output dropped 0.7 percent in 2023 and 1.9 percent in 2024, followed by a sharper 3.4 percent decline in the first quarter of this year.

A customer picks out eggs at a supermarket in Seoul on June 22. [NEWS1]

Experts say the deep discount strategy may help stimulate consumer spending.

“With domestic demand sluggish and recessionary spending patterns persisting, it’s crucial for brick-and-mortar retailers to bring customers into stores, even if it means narrowing profit margins,” said Lee Young-ae, a consumer science professor at Incheon National University.

“If shoppers experience real savings through private-brand or fresh-food discounts, that can lead to additional purchases.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY NOH YU-RIM [[email protected]]