The grocery aisle's newest battleground: The 1,000 won shelf

Emart and Lotte Mart are ramping up their offerings of store-brand products priced below 1,000 won (66 cents) as Korea's major hypermarket chains battle for budget-conscious shoppers amid persistently high inflation.

Emart currently sells 50 products under its store brand, "5K Price," including beef bone broth and protein shakes priced at 980 won. Launched in August last year, the product line focused on ultra-low-priced products and smaller package sizes. The retailer introduced 200 items at launch and expanded the lineup with more than 130 additional products in March.

"The 980-won protein shake has been a huge hit with more than 300,000 units sold in its first three months," an Emart source said. "This summer, we also introduced a mini-sized Korean melon under the [store-brand] lineup for 4,980 won.”

The company has been expanding its lineup of small-package food ingredients and store-brand products priced below 1,000 won, targeting one- and two-person households.

Lotte Mart has followed a similar strategy. The retailer has doubled the number of store-brand products priced below 1,000 won from 45 in 2024 to 90 as of this month. Sales of those products rose 18.3 percent on-year through June 8.

The push into ultra-low-priced private-label products is also seen as an effort to win over shoppers displaced by Homeplus' recent financial struggles.

Homeplus, Korea's second-largest hypermart chain after Emart, was once known for its competitively priced private-label products, but saw its operating loss widen to 546.4 billion won last year. Its sales lead over Lotte Mart, the industry's third-largest player, fell by more than 1 trillion won compared with 2024.

The number of Homeplus stores has also fallen to 67 from more than 140 at its peak.

The ultra-low-priced store-brand products strategy is reportedly attracting customers.

"Ultra-low-priced store-brand products that go viral on social media can help bring customers through the doors in areas previously dominated by Homeplus," a retail industry source said. "Customers who come in to buy those store-brand products end up purchasing other items as well and boost the store’s overall sales."

Analysts view the push into ultra-low-priced private-label products as evolving beyond a simple discount strategy and becoming a way for retailers to build brand loyalty and competitiveness.

“Consumers will continue looking for cheaper alternatives as long as inflation remains elevated, "said Lee Hong-joo, a professor in the Department of Consumer Economics at Sookmyung Women’s University. "Private-label products allow retail stores to send a clear message that they offer value for money."

BY NOH YU-RIM [[email protected]]