The competition for the highest-priced gifts that the retail industry has repeated every holiday has disappeared. Ahead of next year's Lunar New Year, major retail channels, including department stores and convenience stores, have emphasized budget-friendly gift sets with high satisfaction over expensive gifts costing hundreds of millions of won.
According to the retail industry on the 25th, major retail channels, including department stores and convenience stores, began pre-orders for Lunar New Year gift sets starting from the 23rd. Three months ago during this year's Chuseok, three convenience stores and department stores engaged in a battle for the highest-priced gifts.
During last year's Chuseok, the set of 18 bottles of the finest French wine, Château Petrus, introduced by Lotte Department Store, took the top spot for the highest-priced gift. Three months ago, this year's Chuseok was overtaken by the 'Windsor Diamond Jubilee' whiskey set, which was priced at 500 million won and released simultaneously by convenience stores CU, GS25, and Seven Eleven.
It is difficult to find expensive wines or whiskeys in next year's Lunar New Year gift sets. Looking at the gift guide booklet released by department stores and convenience stores ahead of next year's Lunar New Year, all emphasized cost-effectiveness and practicality.
The convenience store franchise CU introduced a special gift set this year, including a sweet potato dried fruit set priced at 19,990 won and a cost-effective processed meat set consisting of assorted meat and pig's feet for 19,000 won.
The liquor corner, which previously boasted whiskeys priced in the tens of millions to hundreds of millions of won, has now been filled with relatively inexpensive alcohol. Instead of the 500 million won whiskey, CU recommended a 44,900 won bottle of Ballantine's 10-Year Whiskey as a main gift for next year's Lunar New Year. The highest-priced whiskey in the booklet was priced around 1.69 million won.
GS25 completely excluded alcohol from its Lunar New Year gift set pre-order guide booklet. Instead, it showcased a variety of mid-priced dried yellow corbina and meat sets ranging from 100,000 to 300,000 won.
Only Seven Eleven positioned high-priced whiskey prominently in its holiday catalog, which was limited to the 13 million won range. Compared to this year's highest-priced gifts for the Lunar New Year or Chuseok, this is one-thirtieth of the previous figures.
Major supermarkets and department stores also introduced Lunar New Year gift sets focused on practicality and utility rather than luxury. Emart nominated cost-effective beef sets available for under 100,000 won as key products for next year's Lunar New Year gift sets and planned new sets in the seafood category also priced under 100,000 won.
Homeplus is accepting pre-orders for the 2025 Lunar New Year gift sets until January 15, increasing the number of gift set products priced between 20,000 and 60,000 won by 24%.
Shinsegae Department Store has lowered the price of gift sets by expanding direct transactions. A Shinsegae Department Store official noted, "To adjust the price range of key products to between 100,000 and 200,000 won, our meat buyer participated directly in beef auctions, and we shortened the distribution process by using fruits harvested at Shinsegae's designated farms," adding that to secure diversity for holiday gifts, they differentiated between cost-effective and premium lines for gift set composition.
Retail industry experts analyzed that after the second half of this year, global prices have surged, and as the economy cools, domestic consumer purchasing behavior is rapidly shifting to a recessionary pattern. An illustrative example of recessionary consumption is that consumers buy fewer gift sets, or if they do, they seek relatively cheaper products.
This year-end has seen the added crisis of a state of emergency. Consumer sentiment in the country has rapidly cooled since the state of emergency on the 3rd.
According to the consumer trend survey released by the Bank of Korea, the Consumer Confidence Index (CCI) this month recorded 88.4, a decrease of 12.3 points compared to the previous month. In terms of the drop, it is the steepest since March 2020 during the pandemic, which saw a decline of 18.3 points.
The Consumer Confidence Index itself is the lowest it has been in two years and one month since November 2022 (86.6). A value greater than 100 indicates an optimistic consumer sentiment compared to the long-term average (2003-2023), while a value below 100 indicates a pessimistic sentiment.
Consultant Kim So-hyung from Davis & Company said, "The overall household income has contracted in the second quarter this year, leading to a significant decrease in the household surplus, which is clearly being reflected since Chuseok and into the year-end."
He added, "While the recessionary consumption trend is relatively less evident in essential goods such as food and beauty products, in gift sets, the emphasis on efficiency is likely to become pronounced for the time being as individual consumption capacity decreases."