Discount stores take on larger rival E-Mart in 'price war'

discount stores-price war


SEOUL, Jan. 14 (Yonhap) -- Discount outlets in South Korea are preparing to take
aim at their larger rival's claim of offering consumers lower prices, industry
officials said Thursday.

Lottemart, run by the country's largest retail conglomerate Lotte Group, said it
will offer goods at prices lower than those at the nation's biggest discounter,
E-Mart, owned by second-largest retailer Shinsegae Group.
"Lottemart will lower prices for main daily necessities to at least 10 won
(US$0.01) below those at the E-Mart chain," the company said in a statement.
The move comes following an announcement made last week by E-Mart, which said it
will permanently lower prices for 12 of its most popular daily items. E-Mart
deals in some 70,000 products, according to industry sources.
Lottemart emphasized that its new price policy will be permanent, saying that
temporary discounts will only confuse consumers.
"The discount stores have so far been quietly engaged in price competition, but
this time competitors have officially declared a price war," said Koo Ja-young,
head of the merchandise division at Lottemart.
"If we remain reluctant to make similar moves (as those at E-Mart), consumers
will have the wrong perception that we carry more expensive goods," said Koo,
explaining why Lottemart made the decision.
Homeplus, the third largest so-called "hypermarket," operated by Samsung Tesco
Co., also started running a price promotion campaign this week, company officials
said.
While it did not make any official announcement on price cuts, the company has
advertised in flyers lower prices than those of its competitors.
E-Mart officials countered later in the day that its earlier announcement was
aimed at assuring customers that the company stood by its commitment to provide
"low prices."
"The competitors are purposely misinterpreting it (our statement) and are
sparking a price war," an E-Mart spokesman said.
ygkim@yna.co.kr
(END)

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