2024-04-26 20:30:01
After the general election, companies raise prices
Government’s response to “0% tariff on seaweed and other products”
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 has been seven months since the prices of 13 menu items 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 another, price increases at restaurant franchises appear 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 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. An official in the restaurant industry said, “With the overall consumer price increase rate in the 3% range, labor costs and raw materials have risen significantly, so if product prices are not raised, a negative margin will occur.”
The government held an emergency economic vice ministerial meeting and a vice ministerial meeting on price relations on this day and decided to apply a 0% quota tariff 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 person: “If you don’t raise prices, you will lose money”
The burden of energy costs overlaps with the rapid rise 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
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 was so high that it was difficult to even cover store rent and labor costs. Mr. Kim said, “The price increase for pork belly is greater than for other meats, especially in 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 are becoming more difficult. Restaurant companies are scrambling to adjust their price lists as if they were 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. Mr. Lee (29), an office worker in Goyang-si, Gyeonggi-do, recently applied for a subscription service that allows him to pre-order a large number of salads and take them home one by one. Even though the menu is similar, the lunch price at a restaurant near the company has risen to around 12,000 to 15,000 won. Mr. Lee said, “The price of subscription services falls to the 7,000-8,000 won range per session.”
The main cause of ‘lunch inflation’ is the rapidly rising 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 managed 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.
The government, which aims to stabilize prices in the 2% range in the second half of the year (July to December), appears to be making all-out efforts to control prices by successively introducing measures to stabilize the supply and demand of agricultural products. Kim Byeong-hwan, First Vice Minister of Strategy and Finance, emphasized, “We will create conditions for the industry to participate in price stability in connection with the government’s support for reducing cost burden,” and added, “We will respond firmly to unfair practices such as collusion.”
However, the high exchange rate and prolonged high oil prices due to the escalation of the Middle East war are considered variables that can push prices up again. Jeong Se-eun, a 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 appropriate investments and subsidies for agriculture return only to the profits of distributors.”
Reporter Kim Hyeong-min [email protected]
Sejong = Reporter Song Hye-mi [email protected]
Reporter Jeong Seo-young [email protected]
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2024-04-26 20:30:01