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Budget bites break the bank as inflation hits low-end restaurants

A delivery man taking orders at a tteokbokki store in Seoul on April 5. [YONHAP]

Dining out is becoming more and more expensive.

Cheap meals that are a must for students, harassed business people, and the broke and strapped are no exception.

In Seoul, the average price of a bowl of Kalguksu noodle soup – the ultimate budget bite – now tops 8,000 won for the first time, up 8.8% year on year.

The average bowl of naengmyeon cold noodles, popular during the summer, approach 10,000 won, up 9.7% year-on-year.

According to the Korean Consumer Agency, the prices of popular dishes, including kimchi-jjigae, bibimbap, samgyetang, samgyeopsal and jjajangmyeonare all standing.

Of the eight meals the consumer agency is monitoring closely, all were up more than 5% except for samgyeopsal and samgyetang.

The food products followed are not high-end meals but accessible and affordable meals.

As the prices tracked by the agency are averages, the actual prices paid by consumers could be higher in certain areas where commercial rents are high.

Rising food ingredient prices are considered to have played a major role. Other factors may have contributed to the sharp increases, including higher labor costs and high demands.

Many restaurants have withheld price increases for several years due to the pandemic. They are now making up for lost time.

Myeongdong Gyoja is one such restaurant.

In February, it started selling kalguksu at 10,000 won, up 1,000 won.

Michelin restaurants also raised the prices of their signature dishes by 1,000 won. A bowl of nyeongmyeon in Bongpiyang now costs 15,000 won, while Pildong Myeonok sells for 13,000 won.

According to Statistics Korea, the cost of restaurant meals rose 6.6 percent in March year on year, the fastest increase in 24 years.

All 39 meals the statistics agency tracks are more expensive.
Galbitang is 12% more expensive, juk 11%, hamburgers 10.4% and hoe 10 percent.

Cafeteria meals are 3.3% more expensive.

Beer prices increased by 3.2% and those of soju by 2.8%.

“As the economy recovers from Covid-19, more and more people want to dine out,” said Chon Sora, a researcher at the Korea Development Institute (KDI). “Rising raw material prices have also been a major reason for the rise in restaurant prices.”

Unlike grocery store prices, once a restaurant raises its prices, it’s hard to lower them.

Underlying inflationary pressures are unlikely to ease any time soon.

For the past six consecutive quarters, international grain prices have driven up prices not only of Korean food products, but also of farm animal feed.

The Korea Rural Economic Institute predicts that prices of imported grain for consumption will rise 10.4 percent in the second quarter from the first three months of the year. The price of cereals imported for livestock feed is expected to increase by 13.6 percent over the same period.

The think tank cited Russia’s invasion of Ukraine and the depreciation of the won against the dollar.

“There will likely be a further increase in the number of people dining out once the government relaxes its Covid-19 distancing regulations,” KDI’s Chon said. “As ingredient costs rise, once current inventory is depleted, costs will rise for restaurants making new purchases.”

BY SOHN HAE-YONG [[email protected]]