The longer the wallet is closed, the clearer the direction becomes once it is opened. This is why consumption quickly focuses on specific industries whenever government subsidies are released.
According to the Ministry of Public Administration and Security and the Ministry of Strategy and Finance on the 2nd, when emergency disaster relief funds were paid in 2020, card sales in the restaurant and retail industry showed a double-digit increase in a short period of time.
In particular, consumption quickly flowed into local commercial districts and franchise stores, and the effect of the policy immediately led to an increase in sales. It has been confirmed that the subsidy is not a simple subsidy, but acts as an ‘incentive to stimulate consumption’.
This ‘high oil price damage support fund’ is also following the same trend. It is worth about 4.8 trillion won, and 70% of the people will be paid from 100,000 won to a maximum of 600,000 won per person. Usage is limited to local Love Gift Certificate affiliated stores and stores with annual sales of 3 billion won or less.
This condition divided the market. Brands with a higher proportion of franchises than large directly managed stores responded first.
Of the approximately 1,490 Mom’s Touch stores nationwide, 99% are franchises. The structure itself is intertwined with policy.
The headquarters encourages each store to attach a sticker saying ‘subsidy funds can be used’ and informs stores where support can be used through the website and SNS. This is a method that forces consumers to already make a choice before entering the store.
We had experience using a similar method to increase the inflow of visits last year when we used consumption coupons. This time, the focus was on how quickly the initial demand could be absorbed.
Chicken franchises are also quick to respond.
BHC and Kyochon Chicken are expanding their contacts with local commercial districts based on their nationwide franchise network. It is a strategy to simultaneously attract store visits and packaging demand while maintaining a delivery-oriented structure.
We are focusing on gaining recognition as a ‘brand that can be used’ by providing information on the availability of subsidies and conducting promotions.
The convenience store industry puts accessibility first.
CU and GS25 are strengthening availability information based on their dense store network nationwide.
Thanks to its structure that allows for small payments, it also functions as a ‘place to spend the remaining amount’. The product lineup is wide, ranging from instant foods, convenience foods, alcoholic beverages, and snacks, making it possible to quickly absorb subsidy consumption.
The key to competition now is not price. ‘How early do you let people know whether it can be used or not?’
The subsidy is consumption with an expiration date. In the end, consumers choose the first brand that comes to mind and the store they can use most easily.
An industry insider said, “Subsidies are more about convenience than discounts,” and added, “Sales are determined by the density of affiliated stores and the speed of information.”
Copyright ⓒ Segye Ilbo. Unauthorized reproduction and redistribution prohibited.
Leave a Reply