Long-term projections for restaurants are grimRestaurant business has become more sluggish since the so-called Kim Young-ran antigraft law went into effect last year, government data showed. Business is expected to remain slow for quite some time.
The government also found that chicken restaurant owners are the most pessimistic among restaurateurs about the current and future economic climate. The Ministry of Agriculture, Food and Rural Affairs said Friday that the Korea Restaurant Business Index fell from 67.51 in the third quarter to 65.04 in the fourth quarter. The outlook for the first quarter of this year declined to 63.59.
A reading above 100 points indicates the majority of survey participants have a positive outlook on their business situation when compared to the previous year, while a reading below 100 indicates a negative view. The government surveyed 3,000 restaurant owners for the research.
The index for international restaurants was the highest at 90.74 in the fourth quarter while chicken restaurants fell the most by the previous quarter from 66 to 60.26. For the outlook on the first quarter, chicken restaurants (58.54) and catering services (59.51) were the most pessimistic.
“It appears the index went down in the fourth quarter due to the weakened domestic consumption due to various reasons, including the uncertainties in the country’s political situation, while the antigraft law and rise in egg prices after the outbreak of avian influenza also had negative impacts,” said Lee Kyu-min, a director at the Agriculture Ministry. “The first quarter outlook also was low since the time tends to be when fewer Koreans dine out as there are big holidays such as Lunar New Year.”
The index on sales and number of customers visiting restaurants also dropped significantly due to the Kim Young-ran Act. The law limits gifts and entertainment to public officials. They cannot accept meals costing more than 30,000 won ($26).
The survey found the index on sales recorded 74.27 and the one on customers was 74.29. The figures mean that survey respondents said their sales and number of customers dropped to about 75 percent of their performances before Sept. 28, when the antigraft law took effect.
Sales of catering services dropped the most to 64.69 percent and were followed by bars (67.89) and regular restaurants (72.51).
The government said the index has remained below the 70 level since it started compiling data in 2011.
BY KIM YOUNG-NAM [firstname.lastname@example.org]