1,000-won bakeries become popular amid high inflation

By Yi Whan-woo

Freshly baked bread, cake, pastries and other treats are increasingly sold at the very affordable price of just 1,000 won ($0.73) at vendor stalls and stores inside subway stations in Seoul amid the rising cost of living.

The so-called 1,000-won bakeries are somewhat comparable to dollar stores in the United States and 100-yen stores in Japan, which target thrifty consumers who want to save the pennies.

Industry sources said that the rise of 1,000-won bakeries hints at the current penny-pinching mindset adopted by many households as they are under a tight budget due to persistent inflation.

“It is not the first time that a low pricing strategy has been implemented targeting consumers who are looking for baked goods, especially in the morning when many of them are busy heading to work and have no time to eat a full meal,” said a public relations staff member at Consumers Korea, a Seoul-based civic group focused on consumer behavior.

The staff member noted that stalls inside subway stations used to offer a deal whereby customers could buy three baked goods for just 1,000 won in the mid- to late 2000s.

In the 2010s, the price slightly went up but was largely at the affordable level of 500 won per baked good.

All bakery items are mass-produced at factories, according to the vendors.

However, to ensure quality and taste, they are cooked early in the morning on the same day that they are delivered to be sold.

The sales items range from plan loaves to pineapple buns, sweet red bean buns, cream rolls, sponge cakes and muffins.

Such a wide variety of choices raised the question of how they can be offered at such a low price despite the price hike in baking ingredients, such as flour, butter, margarine, eggs, salt and sugar.

Speaking on condition of anonymity, a manager at a bakery cafe franchise store said the 1,000-won bakeries are “believed to sell items that are made of low-quality ingredients for cost competitiveness.”

Consumers Korea speculate that such cost competitiveness by the vendor stalls comes due to their lower operating expenses than bakery cafe franchise stores and other independent bakeries.

Consumer inflation in Korea remains at over 3 percent, higher than the government’s target goal of 2 percent.