With major bakery chains in South Korea reportedly hiking prices in response to skyrocketing costs of grain and other raw materials, consumption of the relatively cheaper bread snacks sold across the nation’s convenience stores is gaining popularity among price-sensitive customers, industry officials have said.
One of the biggest convenience store chains in the country, CU’s cake snack sales registered a 72.1% year-on-year growth in June.
GS25, another convenience store owned by GS Retail, also saw a 47.8% rise in the sales of its cake snacks.
The growing popularity of such snacks was kickstarted by the Pokémon Cake, which was being sold at convenience stores throughout South Korea earlier this year in February, with the product’s accumulated sales reaching 50 million items as of 12th of July.
It seems that consumers have come to an understanding that such bakery items, sold at convenience stores, have fairly reasonable quality and are sold at competitive prices, especially in the backdrop of global inflation.
A retail official at GS25 stated that many people’s attention was caught by the Pokémon Cake, leading to the franchise enjoying a huge increase in sales of similar items.
The official added that the stores are benefitting from the increasing prices of products sold at famous bakery chains, all of which have been hit by the surging costs of wheat globally.
The local bakery industry was heavily affected by the rising global grain costs as more than 90% of wheat in the country is imported.
Last month, grain price reached $319.21 per ton, a 27.9% increase from 2021.
Cost of raw sugar has also jumped by more than 10% from the start of this year, and rising petroleum prices are driving up logistics costs further.
Major bakery franchises such as Paris Baguette and Tous Les Jours raised the prices of their bakery items by 6.7% earlier in January and 9.5% on average this month, respectively.
An official from CJ Foodville, a subsidiary of CJ Group and operator of Tous Les Jours, stated that it was inevitable for the company to raise prices as prices of ingredients and raw materials kept increasing locally as well as overseas.