Seoul restaurant, cafe closures surge to 4-year high in Q1
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According to the Seoul city government on Thursday, 5,922 dining businesses closed in Seoul in the first quarter of the year, or a 2.9 percent increase compared to the same period the year before. The figure is the highest first-quarter closure rate in four years and entered the 4 percent range for the first time since 2020.
After peaking at an all-time high of 6,258 closures in the first quarter of 2020, when Covid-19 first hit, the number of dining business closures had decreased but began rising rapidly again in 2023. General restaurants saw significant increases in closures, with Japanese restaurant closures were up 32.8 percent, Chinese restaurants up 17.7 percent, coffee shops up 7.1 percent, and snack bars up 3.4 percent. These sectors, which were directly affected by weaker consumer sentiment, are seeing a decrease in sales and intense low-price competition, leading to reduced profitability. Korean restaurants and bakeries also reported a notable increase in closures compared to previous years.
The closure rate reported by Openub is higher than the government’s figures because it classifies businesses as closed if they had no sales for a year, even if it has yet to file an official closure report. According to the Korea Fair Trade Commission, the closure rate for food franchises was 14.5 percent in 2023.
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