After the general election, companies are reluctant to respond to the government’s “0% tariff on seaweed and other products” by raising prices.
McDonald’s Korea, the number one hamburger market in Korea, announced on the 26th that it will raise the prices of 16 products (22% of the total) starting from the 2nd of next month. The average price increase is 2.8%. It is seven months since the prices of 13 items on the menu were raised by an average of 3.7% in October last year.
Pizza Hut will also increase the prices of Garlic Butter Shrimp and Cheese King products from the 2nd of next month. Following Goobne Chicken, Popeyes, and Kimgane Gimbap, which recently raised their prices one after the other, price increases in restaurant franchises seem to be spreading to all sectors.
In particular, there are some unfavorable views on the ‘relay hike’ as soon as the 22nd general election is over. As we approach ‘Family Month’ in May, when the demand for eating out increases, the burden on ordinary people is expected to increase further. According to the Korea Consumer Agency’s restaurant price trends, the price of cold noodles for one person in Seoul in March was 11,462 won, up 7.2% compared to the same month last year. Gimbap and bibimbap also led the rise in restaurant prices, rising 6.4% and 5.7%, respectively. A restaurant industry official said, “With the overall consumer price increase rate in the 3% range, labor and raw material costs have risen significantly, so if product prices are not raised, a negative margin will occur. “
The government held an emergency economic sub-ministerial meeting and a sub-ministerial meeting on price relations on this day and decided to apply a quota tariff of 0% to seven agricultural products, including cabbage, cabbage, carrots, grapes, dried seaweed, seasoned seaweed, and cocoa beans, to lower import prices.
Imported garlic increased by 53% and red pepper powder increased by 51%… Self-employed: “If you don’t raise prices, you will lose money”
The burden of energy costs overlaps with the rapid increase in food ingredient prices.
The average lunch price for office workers is around 10,000 won.
High exchange rate – concerns about further inflation due to high oil prices
The price of a bowl of cold noodles at Pyeongraeok in Jung-gu, Seoul is 14,000 won on the 26th. The price was raised by 1,000 won in July last year, but as raw material and labor costs rose, the president said he was very concerned about whether it should be raised again this summer. Reporter Byun Young-wook cut@donga.com
Mr Kim (38), who runs a meat restaurant in Seongnam-si, Gyeonggi-do, raised the price of pork belly per serving by 2,000 won from 13,000 won to 15,000 won last month. This is because the wholesale price of pork belly is so high that it is difficult to cover even shop rent and labor costs. Mr said. Kim, “The price increase for pork belly is more than for other meats, especially in the spring,” and “If we don’t raise the price, we will lose money.” As prices in the restaurant industry fluctuate, the lives of ordinary people become more difficult. Restaurant companies are scrambling to adjust their price lists as if they are waiting for the general election to end. Private restaurant operators are also unable to cope with the rapidly increasing costs and are raising prices.
Due to the increase in the price of eating out, the price of lunch for office workers has reached 10,000 won. According to Sikshin, a mobile meal ticket service company, the average lunch price for office workers in the first quarter of this year (January to March) was 10,000 won, exceeding 10,000 won for the first time since statistics were compiled in May 2022. Recently, Mr. Lee (29), an office worker in Goyang-si, Gyeonggi-do, applied for a subscription service that allows him to pre-order a large number of salads and take them home one by one. Although the menu is similar, the price of lunch at a restaurant near the company has risen to around 12,000 to 15,000 won. Mr said. Lee, “The price of subscription services falls in the range of 7,000-8,000 won per session.”
The main cause of ‘lunch inflation’ is the rapid increase in the prices of food ingredients. According to the Korea Customs Service on the 26th, the prices of 52 items, more than half of the 105 agricultural, livestock and fishery products controlled by the Korea Customs Service, rose last month. The imported price of frozen garlic was 2,231 won per 1 kg, up 53.0% from the same period last year (1,458 won). Red pepper powder is 18,150 won and ginger is 5,046 won, respectively 50.9% and 29.2% more expensive than a year ago.
It appears that the government, which aims to stabilize prices in the 2% range in the second half of the year (July to December), is making every effort to control prices by introducing measures to stabilize the supply and demand of agricultural products successively . . Kim Byeong-hwan, Chief Vice Minister of Strategy and Finance, emphasized, “We will create conditions for the industry to participate in price stability in connection with government support to reduce the cost burden,” and added, “We will respond firmly to unfairness. practices such as collusion.”
However, the high exchange rate and prolonged high oil prices due to the escalation of the Middle East war are seen as variables that can push prices up again. Jeong Se-eun, professor of economics at Chungnam National University, said, “Because the abnormal climate (which caused high prices) will continue, structural improvements must be made to ensure that investments and appropriate subsidies for agriculture return only to profit. distributors.”
Correspondent Kim Hyeong-min kalssam35@donga.com
Sejong = Reporter Song Hye-mi 1am@donga.com
Reporter Jeong Seo-young cero@donga.com
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