Lotte and Emart are expanding their own-brand product lines in light of rising food prices

Lotte Mart CEO Kang Sung-hyun (left) and French Ambassador to Korea Philippe Bertoux pose for a photo at Lotte Mart’s French food sales event at the Zettaplex branch in Jamsil, southern Seoul, on July 11. (NEWS1)

In response to the global economic downturn and rising food prices, Korean retailers are expanding their private label product ranges.

Retail giant Lotte Mart, for example, is expanding its PB portfolio in partnership with European Marketing Distribution (EMD), Europe’s largest retail alliance. Lotte joined the association in July along with 249 other companies, sources said, after its jointly developed PB range of two chocolate products was well received in the first seven months of 2024.

Founded in Switzerland in 1989, EMD is Europe’s largest retailer. Fourteen major European retailers are regular members, including Germany’s MaKant Europe GmbH & Co. KG, Spain’s Euromadi, Italy’s ESD Italia and France’s Auchan Retail.

In January, Lotte Mart was able to introduce French chocolate at a price 30% lower than the average for comparable products. The product was a hit, selling around 300,000 units in the first seven months and becoming the best-selling flat chocolate bar in the country.

Building on this success, Lotte Mart is currently working with a Portuguese oil and fat products manufacturer, also an EMD member, to offer low-priced olive oil and grape seed oil. The retailer is also looking into developing jelly products in collaboration with a major German confectionery manufacturer. “European food, especially dairy products, oils and confectionery, are extremely competitive in terms of price,” said a Lotte Mart representative. “We plan to expand our product range to include dairy products, frozen foods and meal replacements.”

Another retail giant, Emart, has cut prices on its PB food brand Peacock by as much as 40% over the past month. The price cuts affected 300 of the most popular products out of a total of 700. Supermarket chain Homeplus is focusing on strengthening its low-cost PB products, which are tailored to consumers who cook at home. The retailer has revamped its own-brand ready-to-eat meals ‘Homeplus Home Meal’ and is adding a number of new products to its product range. One notable example is a large 1-kilogram (2.2-pound) Subscribe (black bean noodles) priced at 9,990 won ($7.37). “We work with experienced researchers to use carefully selected ingredients and offer products at affordable prices that reduce the burden on consumers,” a Homeplus spokesperson said.

A customer poses for a photo holding CU’s affordable private label products, including HEYROO Tofu Deuktem. (CU)

Convenience stores are also increasing competition in the low-priced PB market. Convenience store chain CU has announced that it will launch a series of new products under its “Deuktem” (Bang for your Buck) line starting this month. A prime example is the “HEYROO Tofu Deuktem,” which costs 1,000 won. The 300-gram (10.6-ounce) tofu block is 45 percent cheaper than competitors.

Since the beginning of the year, GS25 has also introduced its own brand “Real Price” for price-sensitive products. The company currently offers 22 products under this brand and plans to add another 15 to 20 by the end of this year. Real Price products are usually 20 to 30 percent cheaper than comparable products.

7-Eleven sells more than 2,000 PB products under the “Seven Select” brand and is looking to further diversify its offerings. Last month, the company collaborated with Otoki, formerly known as Ottogi, to launch “Seven Select Yeolpadak Bokkeummyeon” (spicy fried chicken noodles with onions). The company plans to continue collaborating with various brands to add new PB products to its lineup.

“As food prices rise and the number of single-person households increases, the demand for affordable products will continue to grow,” said a convenience store industry official. “Strengthening the competitiveness of PB food products has become an important issue for the industry.”

BY JANG JOO-YOUNG ([email protected])