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#701, Seoul YWCA, 1-1, Myeongdong 1-ga, Jung-gu, Seoul (Postal code: 100-021)
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Implementation Date: |
November 12, 2010 |
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Person in Charge: |
Secretary-General Choi Su-gyeong |
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Assistant administrator Lee Seon-hwa |
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Tel:
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02-774-4060 |
The Korea National Council of Consumer Organizations conducts an investigation of current conditions of the Price Indication System and consumers' awareness.
The Korea National Council of Consumer Organizations (Chairperson Kim Jae-ok) investigated the current implementation conditions of the price indication system and consumers' awareness in order to ensure the early establishment of the price indication system and sound distribution and trade order when the seller's price indication (open price) system is expanded in 2009.
An investigation of the current implementation conditions of the price indication system was conducted on 1,396 stores, which sell processed foods and general merchandise goods, whose store sizes are over 100㎡, located in 16 cities across the nation between September 27 and October 1, 2010. An investigation of consumers' awareness was conducted on 1,504 adult males and females over 20 years of age who live in 16 cities across the nation between September 27 and October 8, 2010.
Summary of investigation results
The implementation rate of the unit price indication system was lower than that of the sales price indication system, and it was not easy to identify.
According to an investigation of the implementation of the sales price and unit price indication systems for eight processed foods (cookies, frozen desserts and ice cream, cereal, sausage, fish cake, soda drinks, frozen dumplings) and one item of general merchandise goods (box tissue products), the implementation rate of the sales price indication among these product items was 84.3% (762 stores), but that of the unit price indication was 51.7% (389 stores). In addition, according to the recognisability of indicated prices, the ratio of products with an "easy to see" price indication was 91.8% on average, but that of products with an "easy to use" unit price was 66.8% (Refer to Tables 1 and 2).
Depending on the type of stores, the implementation ratio of mid-sized supermarkets (Sales price indication: 73.5%, Unit price indication: 19.4%) was relatively low compared to that of department stores (Sales price indication: 97.5%, Unit price indication: 93.1%), discount stores (Sales price indication: 96.0%, Unit price indication: 80.6%), and chain stores (Sales price indication: 88.8%, Unit price indication: 66.3%) (Refer to Table 3).
The implementation ratio of the price indication of frozen desserts and ice cream was low.
In the case of frozen desserts and ice cream, the ratio of stores which were selling products with no indication of recommended consumer prices was 95.1% (1,033 stores), which is a relatively good implementation ratio compared to other products (Refer to Table 4).
However, the ratio of stores, which sell frozen desserts and ice cream with sales price indication and unit price indication, was merely 50% and 30%, respectively, which shows that satisfactory price information is not provided to consumers (Refer to Table 1).
Consumers think that the price indication system is useful, but do not know very much about the system.
According to an investigation of consumers' awareness of the price indication system, the ratio of consumers who answered that they knew about the system was 51.1% (766 respondents), and the ratio of consumers who knew very well the unit price indication system was 43.3% (648 respondents), which shows that the majority of consumers still do not know very much about the price indication system. However, the ratio of consumers, who responded that the sales price indication system and the unit price indication system were useful in purchasing products, were 71.9%(526 respondents) and 92.7% (304 respondents), respectively, which shows that the price indication system is positively affecting consumers (Refer to Tables 5 and 6).
The ratio of consumers who answered that they did not know that the number of items whose recommended consumer price indication was prohibited has been expanded was 51.0% (726 respondents). In addition, the ratio of consumers who opposed the prohibition of recommended consumer price indication was 32.2% (456 respondents), and the majority of them answered that they could not trust price indicators because there are no standards regarding price indications, which shows that consumers do not seem to know the purpose of the price indication system (Refer to Tables 7, 8, and 9).
In addition, the ratio of consumers who answered that they had an experience of purchasing products at a price which was different from the price indicated on products was 43.5% (651 respondents), which shows that the price indication system is not being implemented properly (Refer to Table 10).
Suggestions
1) Monitoring of businesses should be strengthened in order to firmly establish the price indication system.
The results of our investigation showed that the ratio of products whose sales prices were not indicated was 15.7%, and the ratio of products whose unit prices were not indicated was 48.3%. Accordingly, in order to implement the price indication system as soon as possible, the sellers’ compliance with the regulation, as well as continuous guidance and monitoring by related organizations such as supervising agencies, government agencies, and local autonomous groups, are needed.
2) Detailed standards for the price indication system, including the size of price indication, should be established.
Within current practice, there are no concrete standards regarding the size and method of price indication, so each store is using different fonts, font size, and arrangement methods. In the case of unit price indication, its size is very small compared to the sales price, so it is not easy for consumers to check unit prices. There should be a detailed standard regarding font size so that consumers can see indicated prices.
3) The number of stores which require indication of prices is on the rise.
In the case of unit price indication, the current regulations require that all stores within a large market (traditional markets excluded) should indicate unit prices. When selecting stores which are required to indicate prices, such criteria as sales, trading area, and sales characteristics should be considered. In the long run, all stores should comply with the price indication system.
4) The number items for which it is prohibited to indicate consumer recommended prices is being expanded.
Among the products which were additionally prohibited from indicating consumer recommended prices in 2009, the ratio of the products, which were still on the market with consumer recommended prices, was 4~8%. In order to increase consumers' credulity in prices, products with consumer recommended prices should be taken out of the market as soon as possible. In addition, by expanding the number of products which are prohibited from indicating consumer recommended prices, as well as by strictly implementing the price indication system, an open price system should be implemented smoothly.
5) Policies for actively increasing consumers' awareness of the price indication system are needed.
The sales price indication system has been implemented for over 10 years, but our investigation shows that the majority of consumers are not aware of the system. To increase consumers' awareness about the price indication system, we will distribute promotional materials, and take actions to promote the system through public advertisements.
The Korea National Council of Consumer Organizations will engage in promotional activities for consumers regarding the price indication system in order to establish sound trading order and to provide accurate price information to consumers so that they can participate in the rational consumption of goods throughout their lives.
Group Members
Green Consumers Network, Citizens Alliance for Consumer Protection of Korea, National Council of Housewives Classes, Korea Women's Association, Korea Women's Association, Korea Consumer Affairs Institute, Consumers Union of Korea, Korea Consumer Education Center, National Council of YMCAs of Korea, YWCA of Korea
※ Appendix
[Table 1] Status of the indication of sales prices and unit prices
|
Item |
Product |
Category |
Sales prices |
Unit prices |
|
Indicated |
Not indicated |
Total |
Indicated |
Not indicated |
Total |
|
Cookies |
Choco pie |
No of stores |
949 |
237 |
1,186 |
441 |
508 |
949 |
|
ratio (%) |
80.0 |
20.0 |
100.0 |
46.5 |
53.5 |
100.0 |
|
Saewookkang |
No of stores |
900 |
373 |
1,273 |
399 |
501 |
900 |
|
ratio (%) |
70.7 |
29.3 |
100.0 |
44.3 |
55.7 |
100.0 |
|
Frozen desserts and ice cream |
World Cone |
No of stores |
622 |
525 |
1,147 |
213 |
409 |
622 |
|
ratio (%) |
54.2 |
45.8 |
100.0 |
34.2 |
65.8 |
100.0 |
|
Merona |
No of stores |
592 |
435 |
1,027 |
218 |
374 |
592 |
|
ratio (%) |
57.6 |
42.4 |
100.0 |
36.8 |
63.2 |
100.0 |
|
Cereal |
Corn Frost |
No of stores |
775 |
72 |
847 |
468 |
307 |
775 |
|
ratio (%) |
91.5 |
8.5 |
100.0 |
60.4 |
39.6 |
100.0 |
|
Corn Flake |
No of stores |
1,012 |
106 |
1,118 |
537 |
475 |
1,012 |
|
ratio (%) |
90.5 |
9.5 |
100.0 |
53.1 |
46.9 |
100.0 |
|
Sausage |
Kentucky Frank |
No of stores |
640 |
60 |
700 |
324 |
316 |
640 |
|
ratio (%) |
91.4 |
8.6 |
100.0 |
50.6 |
49.4 |
100.0 |
|
American Frank |
No of stores |
545 |
48 |
593 |
268 |
195 |
463 |
|
ratio (%) |
91.9 |
8.1 |
100.0 |
58.0 |
42.0 |
100.0 |
|
Fish cake |
Daerim Busan Fish Cake |
No of stores |
736 |
58 |
794 |
437 |
299 |
736 |
|
ratio (%) |
92.7 |
7.3 |
100.0 |
59.4 |
40.6 |
100.0 |
|
Samho Busan Fish Cake |
No of stores |
782 |
63 |
845 |
447 |
335 |
782 |
|
ratio (%) |
92.5 |
7.5 |
100.0 |
57.2 |
42.8 |
100.0 |
|
Soda drinks |
Coca Cola |
No of stores |
838 |
152 |
990 |
432 |
406 |
838 |
|
ratio (%) |
84.6 |
15.4 |
100.0 |
51.6 |
48.4 |
100.0 |
|
Chilsung Cider |
No of stores |
1,097 |
236 |
1,333 |
510 |
587 |
1,097 |
|
ratio (%) |
82.3 |
17.7 |
100.0 |
46.5 |
53.5 |
100.0 |
|
Frozen dumpling |
Pork Water Dumpling |
No of stores |
730 |
86 |
816 |
425 |
305 |
730 |
|
ratio (%) |
89.5 |
10.5 |
100.0 |
58.2 |
41.8 |
100.0 |
|
Fresh Vegetable Water Dumpling |
No of stores |
588 |
61 |
649 |
374 |
214 |
588 |
|
ratio (%) |
90.6 |
9.4 |
100.0 |
63.6 |
36.4 |
100.0 |
|
Box tissue |
Kleenex |
No of stores |
1,031 |
96 |
1,127 |
509 |
522 |
1,031 |
|
ratio (%) |
91.5 |
8.5 |
100.0 |
49.4 |
50.6 |
100.0 |
|
Culture Club |
No of stores |
428 |
54 |
482 |
224 |
204 |
428 |
|
ratio (%) |
88.8 |
11.2 |
100.0 |
52.3 |
47.7 |
100.0 |
|
Clean Country |
No of stores |
694 |
56 |
750 |
392 |
302 |
694 |
|
ratio (%) |
92.5 |
7.5 |
100.0 |
56.5 |
43.5 |
100.0 |
|
Total average |
No of stores |
762 |
160 |
922 |
389 |
368 |
757 |
|
ratio (%) |
84.3 |
15.7 |
100.0 |
51.7 |
48.3 |
100.0 |
[Table 2] Degree of recognisability of sales price and unit price by product item
|
Item |
Category |
sales price |
Unit price |
|
Very easy to see |
Easy to see |
Difficult to see |
Very difficult to see |
Total |
Very easy to see |
Easy to see |
Difficult to see |
Very difficult to see |
Total |
|
Cookies |
No of stores |
453 |
413 |
36 |
23 |
925 |
151 |
147 |
92 |
31 |
420 |
|
ratio (%) |
49.0 |
44.6 |
3.9 |
2.5 |
100.0 |
35.9 |
35.1 |
21.8 |
7.4 |
100.0 |
|
Frozen desserts and ice cream |
No of stores |
266 |
266 |
48 |
28 |
607 |
74 |
70 |
52 |
21 |
216 |
|
ratio (%) |
43.8 |
43.8 |
7.9 |
4.6 |
100.0 |
34.3 |
32.3 |
23.8 |
9.7 |
100.0 |
|
Cereal |
No of stores |
431 |
415 |
38 |
11 |
894 |
171 |
168 |
127 |
38 |
503 |
|
ratio (%) |
48.2 |
46.2 |
4.4 |
1.2 |
100.0 |
33.9 |
33.3 |
25.4 |
7.5 |
100.0 |
|
Sausage |
No of stores |
215 |
277 |
41 |
20 |
552 |
102 |
105 |
82 |
32 |
320 |
|
ratio (%) |
39.1 |
50.3 |
7.2 |
3.5 |
100.0 |
31.9 |
32.6 |
25.6 |
9.8 |
100.0 |
|
Fish cake |
No of stores |
343 |
358 |
43 |
16 |
759 |
152 |
139 |
112 |
40 |
442 |
|
ratio (%) |
45.2 |
47.1 |
5.6 |
2.1 |
100.0 |
34.5 |
31.4 |
25.2 |
9.0 |
100.0 |
|
Soda drinks |
No of stores |
434 |
472 |
41 |
21 |
968 |
154 |
164 |
122 |
32 |
471 |
|
ratio (%) |
44.8 |
48.9 |
4.2 |
2.2 |
100.0 |
32.6 |
34.9 |
25.9 |
6.7 |
100.0 |
|
Frozen dumpling |
No of stores |
291 |
303 |
49 |
17 |
659 |
145 |
126 |
101 |
29 |
400 |
|
ratio (%) |
44.3 |
45.8 |
7.4 |
2.5 |
100.0 |
36.2 |
31.4 |
25.2 |
7.3 |
100.0 |
|
Box tissue |
No of stores |
308 |
357 |
37 |
15 |
718 |
119 |
127 |
103 |
27 |
375 |
|
ratio (%) |
42.6 |
50.2 |
4.9 |
2.2 |
100.0 |
31.2 |
34.2 |
27.4 |
7.2 |
100.0 |
|
Average |
No of stores |
342 |
360 |
41 |
19 |
762 |
132 |
130 |
99 |
31 |
392 |
|
ratio (%) |
44.5 |
47.3 |
5.6 |
2.6 |
100 |
33.6 |
33.2 |
25.2 |
8 |
100.0 |
[Table 3] Average number of stores indicating sales prices and unit prices by business type
|
Type |
Item |
Dept. Store |
large mart |
chain mart |
mid-size mart |
|
Indicated |
Not indicated |
Indicated |
Not indicated |
Indicated |
Not indicated |
Indicated |
Not indicated |
|
Sales price |
No of
stores |
42 |
4 |
176 |
9 |
171 |
23 |
334 |
151 |
|
ratio (%) |
97.5 |
2.5 |
96.0 |
4.0 |
88.8 |
11.2 |
73.5 |
26.5 |
|
Unit price |
No of
stores |
37 |
2 |
163 |
38 |
128 |
65 |
61 |
264 |
|
ratio (%) |
93.1 |
6.9 |
80.6 |
19.4 |
66.3 |
33.7 |
19.4 |
80.6 |
[Table 4] Products which were prohibited from indicating consumer recommended prices
|
Item |
Product |
Category |
Status of consumer recommended price indication |
Total |
|
Indicated |
Not indicated |
|
Instant Noodle |
Shin Ramyun |
No of stores |
110 |
1,261 |
1,371 |
|
ratio (%) |
8.0 |
92.0 |
100.0 |
|
Samyang Ramen |
No of stores |
116 |
1,240 |
1,356 |
|
ratio (%) |
8.6 |
91.4 |
100.0 |
|
Jin Ramen |
No of stores |
108 |
1,235 |
1,343 |
|
ratio (%) |
8.0 |
92.0 |
100.0 |
|
Cookies |
Choco pie |
No of stores |
97 |
1,089 |
1,186 |
|
ratio (%) |
8.2 |
91.8 |
100.0 |
|
Saewookkang |
No of stores |
92 |
1,181 |
1,273 |
|
ratio (%) |
7.2 |
92.8 |
100.0 |
|
Frozen desserts and ice cream |
World Cone |
No of stores |
60 |
1,087 |
1,147 |
|
ratio (%) |
5.2 |
94.8 |
100.0 |
|
Merona |
No of stores |
48 |
979 |
1,027 |
|
ratio (%) |
4.7 |
95.3 |
100.0 |
[Table 5] Consumers' awareness of the sales price indication and unit price indication systems
|
Category |
Sales price |
Unit price |
|
Frequency |
ratio (%) |
Frequency |
ratio (%) |
|
Aware
Not Aware |
766
733 |
51.1
48.9 |
648
849 |
43.3
56.7 |
|
Total |
1,499 |
100.0 |
1,497 |
100.0 |
[Table 6] The influence of the sales price and unit price indicators on the purchase of products
|
Category |
Sales price |
Unit price |
|
Frequency |
ratio (%) |
Frequency |
ratio (%) |
|
Very helpful
A little helpful
Not very helpful
Not at all helpful |
237
289
166
39 |
32.4
39.5
22.7
5.4 |
163
141
20
4 |
49.8
42.9
6.2
1.1 |
|
Total |
730 |
100.0 |
328 |
100.0 |
[Table 7] Consumers' awareness of the expansion of products which are prohibited from indicating consumer recommended prices
|
Category |
Frequency |
ratio (%) |
|
Aware
Not Aware |
698
726 |
49.0
51.0 |
|
Total |
1,424 |
100.0 |
[Table 8] Consumers' approval of the expansion of products which are prohibited from indicating consumer
|
Category |
Frequency |
ratio (%) |
|
Strongly agree
Agree
Neutral
Disagree
Strongly Disagree |
222
322
416
310
146 |
15.7
22.7
29.4
21.9
10.3 |
|
Total |
1,416 |
100.0 |
[Table 9] Reasons for approval and disapproval of the expansion of products which are prohibited from indicating consumer recommended prices
|
Item |
Category |
Frequency |
ratio (%) |
|
Reason of approval |
- Because indicated prices are much higher than actual sales prices
- Because indicated prices can be abused as sales strategies by the sellers such as exaggerated sales
- Because indicated prices are never actually traded on the market
- Because indicated prices do not help actual price information |
234
216
46
22 |
45.3
41.8
8.8
4.2 |
|
Total |
518 |
100.0 |
|
Reason of disapproval |
- Because consumers cannot trust prices due to an absence of criteria regarding prices
- Because indicated prices do not affect a price decrease
- Because comparing prices is burdensome
- Because big marts can easily fix prices in collusion tacitly, which will affect small and medium sized stores negatively |
296
24
62
52 |
68.3
5.4
14.2
12.1 |
|
Total |
434 |
100.0 |
[Table 10] Consumers' experience of non-compliance with the price indication system
|
Category |
Frequency |
ratio (%) |
|
yes
no |
651
847 |
43.5
56.5 |
|
Total |
1,498 |
100.0 | |
