Korea’s burger inflation hit the highest in 19 years

Lotteria Co. outlet [Courtesy of Lotteria]

South Korea’s inflation in fast-food prices in April increased altogether due to the ongoing rise in raw materials prices.

According to data released by Statistics Korea on Thursday, the price of burgers rose 17.1 percent in April from 10.3 percent in March. The increase marked the highest growth since July 2004. Pizza prices gained 12.2 percent, the highest since the global financial crisis of 2008.

Fried chicken prices rose 6.8 percent in April, 1.6 percentage points higher than the previous month. Growth in the chicken price had slowed for seven consecutive months, from 11.4 percent last August to 5.2 percent in March.

Though overall consumer price inflation slowed to around 3 percent in April, fast-food prices such as burgers, pizza and fried chicken have continued to rise as both local and multinational food chains scrambled to raise their prices.

For burgers, Lotteria Co., a home-grown fast food restaurant chain, raised its prices by 5.1 percent in February, following previous hikes in December 2021 and June. McDonald’s, the world’s largest fast-food restaurant chain, raised prices on some items by an average of 5.4 percent in February, following the hikes in February and August. Burger King hiked prices thrice between January and March. KFC also raised prices on some of its menu items from last January to this February.

This was the same for pizza chains.

South Korea’s home-grown pizza brand Mr. Pizza hiked prices of its pizzas and side dishes in February after the rise in some pizza menus March. Domino’s Pizza announced a price hike twice January and August.

Kyochon F&B Co., the operator of Korea’s leading fried chicken franchise Kyochon Chicken, raised its price by 3,000 won on May 3. That means customers will get a box of fried chicken for nearly 30,000 won ($22.58), including a delivery fee, generally between 3,000 and 5,000 won.

The price hikes by fast-food brands were driven by the overall increases in retail prices, such as flour, and other costs, like wages.

“Food chains, in the face of high operating costs and wages, can’t afford not to raise their product prices, and further hikes is a matter of time,” said an unnamed source from the food industry.

In response, the government sought to stop the price hikes. The Ministry of Agriculture, Food and Rural Affairs held a meeting on April 21 with major restaurant brands, such as Starbucks Korea, Lotteria and Kyochon F&B, to plead with them to refrain from further hikes, a call for cooperation to stabilize prices.

However, inflationary pressures on food prices remain. Ongoing sluggish earnings of food chains could force them to resume price hikes and the prices of raw materials remain higher than before the war in Ukraine.