Korean convenience stores, supermarkets offer big discounts to lure customers

The Kim Hyeja lunch packs [Photo provided by GS25]

Korean convenience stores and big supermarkets are engaged in heated competition to introduce ultra-low-price products as consumers consider prices first when deciding purchases given rising inflation.

GS25, a South Korean convenience store chain operated by GS Retail Co., said on Thursday it will offer discounts of up to 90 percent until the end of this month for its popular Kim Hyeja lunch packs in line with the launch of a new Hyejaroun Homemade Rice Nebiani Chicken Gangjeong product. The Kim Hyeja lunch pack, which was launched in February, is gaining popularity for its affordable price tag and is sold as much as 43 percent cheaper price. It has sold more than 3 million units within 50 days of its launch.

For three days on April 10, 20 and 30, the convenience store will offer 50 percent discount coupons to 10,000 people a day through SK telecom Co.’s T membership app, a 20 percent discount for members of its food subscription service and a 1,000 won ($0.76) payback benefit for Kakao Pay users. When combining these benefits, Hyejaroun Homemade Rice Jeyuk Stir-fry, which costs 4,500 won, can be purchased for only 350 won, and Hyejaroun Homemade Rice Nebiani Chicken Gangjeong, which is priced at 4,900 won, can be purchased for 470 won.

GS25 earlier sold three types of beef burger, which costs 3,900 won each, at 780 won at a discount of up to 80 percent by applying telecommunication company discounts and event cards. Emart24 Inc., the convenience store arm of Korean retail giant Emart Inc., released a Wonder Bap lunch pack consisting only of rice and fried kimchi for 1,500 won.

7-Eleven Inc., a multinational chain of retail convenience stores, also launched a promotion during the school season to sell a combination of triangle gimbap, which costs 1,100 won, and cider, priced at 1,400 won, at 550 won, a 78 percent discount. Shinsegae Food Co., the food business arm of Shinsegae Group, introduced a 0.5-serving salad for 1,800 won last month. Lotte Mart, a local hypermarket, sells 100 grams of pork ribs for 990 won, as well as offering 50 percent discounts on Korean beef, salmon and halibut sashimi every month. Thanks to this, Lotte Mart saw sales of U.S. beef increase by 60 percent compared with the first event last year and sales of pork ribs increase sevenfold, chicken fivefold, and pork feet and live snow crabs threefold.

Ultra-low-price marketing also has an additional benefit. A case in point is that customers purchase ultra-low-priced products together with other products. According to GS25, its customers purchase Kim Hyeja lunch packs along with other products such as ramen, drinks and alcoholic beverages, and the average additional sales per customer stood at 2,360 won.

“We are concentrating our marketing budgets on discounts on some strategic items in order to foster a positive brand image of contributing to price stability and increase customer visits to stores,” an industry source said.