Consumers Seeking Discounted Prices and Imperfect Agricultural Products Amid Soaring Inflation

6 out of 10 Consumers Say They Have Bought Motnani Agricultural Products
Sales of Motnani Agricultural Products and Clearance Discount Items Increase at Large Supermarkets

Cabbages, whose prices have risen sharply due to high inflation and adverse weather conditions, were displayed at a large supermarket in Seoul on the 23rd. [Image source=Yonhap News]

[Asia Economy Reporter Park Hyun-joo] As the cost of food skyrockets, more consumers are seeking out imperfect agricultural products or discounted items near closing time. These products may lack visual appeal but are of good quality, and consumers purchase items nearing their expiration date or store closing time at discounted prices to save on living expenses.

Agricultural product prices continue to soar daily. According to the Korea Agro-Fisheries & Food Trade Corporation (aT) Agricultural Product Distribution Information (KAMIS) as of the 28th, the retail price of one head of cabbage was 8,987 won, about 63% higher than a year ago (5,530 won). Some places recorded a maximum price of 14,900 won per cabbage. The retail price of one radish also jumped 91% from 1,982 won a year ago to 3,803 won, and carrots at 1 kg (5,149 won) increased by 1,622 won compared to 3,527 won a year ago.

Prices of staple foods such as ramen and packaged kimchi have also risen consecutively. Nongshim raised prices of major products including Shin Ramyun by an average of 11.3% starting from the 15th, and Paldo will increase prices of all ramen products by an average of 9.8% from the 1st of next month. CJ CheilJedang raised Bibigo kimchi prices by an average of 11.3% from the 15th, and Daesang plans to increase Jongga kimchi prices by an average of 9.8% starting next month.

As the perceived inflation rises, consumers are tightening their belts. According to a survey titled '2022 Second Half National Consumer Spending Plan' conducted by the Federation of Korean Industries through the polling agency Mono Research from the 9th to the 15th, targeting 1,004 citizens aged 18 and over nationwide, 6 out of 10 respondents (59.7%) said they plan to reduce their consumer spending in the second half of this year compared to the first half.

In particular, those with lower incomes plan to cut spending more significantly. Respondents in the bottom 20% income bracket said they would reduce their spending by an average of 7.9% in the second half compared to the first half, whereas those in the top 20% income bracket reported a minimal decrease of 0.01%, maintaining a similar level to the first half.

Consequently, consumers are seeking relatively inexpensive imperfect products or discounted items. According to a survey conducted by the Korea Consumer Agency in February last year targeting 200 consumers residing in Seoul and Gyeonggi Province, 6 out of 10 respondents (60.5%) reported having purchased imperfect agricultural products. Among those with purchase experience, 95.5% expressed willingness to repurchase, and about half of the respondents (46.4%) cited low price as the main reason for buying imperfect agricultural products.

The vegetable sales section at a large supermarket in Seoul on the 14th. [Image source=Yonhap News]

Sales of imperfect agricultural products at major large retailers have increased. Homeplus reported that sales of 'Matnani Agricultural Products' sold at discounted prices increased by 78% from the same period last month between the 14th and 28th of last month, and Lotte Mart's 'Sangsaeng Fruits and Vegetables,' offered at prices lower than market rates, saw sales grow by 300% compared to the same period last year.

Sales of discounted items near closing time have also risen. According to Emart, sales at ready-to-eat stores after 8 p.m. increased by 23.8% from the 1st of last month to the 19th of this month. Job seeker Choi said, "If I buy chicken gangjeong or jokbal at discounted prices near closing time and reheat them in an air fryer, it’s not much different from buying them at full price," expressing satisfaction with discounted food items.

Meanwhile, expectations that the rapid rise in prices will subside are growing as the expected inflation rate (consumer price increase forecast over one year) declines. According to the 'September Consumer Sentiment Survey' released by the Bank of Korea on the 27th, the expected inflation rate was recorded at 4.2%. It had surged to a record high of 4.7% in July but has fallen for two consecutive months since August (4.3%).

The government has also requested food manufacturers to refrain from raising prices. At a price stabilization meeting with food manufacturers on the 27th, the Ministry of Agriculture, Food and Rural Affairs stated, "While economic agents are bearing the burden of rising prices due to high inflation, the food industry has seen increases in both sales and operating profits compared to the previous year," adding, "Industry cooperation is urgently required to stabilize prices." It further mentioned, "Consumers criticize that once food prices rise, they rarely fall," and urged, "Please refrain from unfair or opportunistic price increases that take advantage of high inflation."

This content was produced with the assistance of AI translation services.