Inflation fuels surge in value retail channels

As inflation continues to weigh on household budgets, consumers are increasingly gravitating toward value-oriented retail channels. The shift toward more cost-conscious spending has delivered a strong boost to discount retailers in South Korea and abroad, many of which are reporting record earnings.

According to industry data released Wednesday, Asung Daiso, which operates the Daiso chain, posted record sales of 4.5364 trillion won last year, up 14.3 percent from 3.9689 trillion won a year earlier. Operating profit rose 19.2 percent to 442.4 billion won, with an operating margin of about 9.8 percent.

Warehouse-style retailers built on bulk purchasing are also benefiting from sustained inflation. E-Mart Traders reported sales of 3.852 trillion won last year, an 8.5 percent increase from the previous year. Operating profit surged 39.9 percent to 129.3 billion won, while customer numbers rose 3 percent.

The trend is also visible in e-commerce. SSG.com said sales from its scheduled delivery service for warehouse retail goods jumped 38 percent in the first quarter compared with a year earlier.

Behind the shift is a broader change in consumer behavior. As economic conditions soften, shoppers are placing greater emphasis on price and utility over brand loyalty. Many are closely comparing unit prices and opting for bulk purchases, a pattern often described as “cherry picking.”

The same dynamic is playing out globally. MINISO Group Holding, which operates the Miniso discount lifestyle chain in China, reported record annual revenue of 21.4438 billion yuan, up 26.2 percent from the previous year.

In Japan, Pan Pacific International Holdings, operator of Don Quijote discount stores, continued to expand amid persistent inflation. For fiscal 2025, covering July 2024 through June 2025, revenue rose 7.2 percent to 2.2467 trillion yen, while operating profit climbed 15.8 percent to 166.2 billion yen.

Global warehouse retailer Costco also reported record results. For fiscal 2025, net sales reached $269.9 billion, up 8.1 percent from a year earlier, while net income rose 9.9 percent to $8.099 billion.

Consumer sentiment data points to the same trend. A 2025 global consumer outlook report by NielsenIQ found that 67 percent of respondents were willing to switch brands or try new ones if they offered lower prices. The report also showed a 4 percent increase this year in consumers choosing larger package sizes.

Lee Yeong-ae, a professor of consumer studies at Incheon National University, said demand is increasingly shifting toward low-cost and bulk-purchase channels globally. She added that during economic slowdowns, price becomes the decisive factor in buying decisions, boosting performance for value-focused retailers.


김다연 damong@donga.com