Coffee Bean raises its latte price 6%
The Korean unit of the U.S. coffee shop franchise announced Sunday it will raise the price of a small Americano from 4,500 won ($4.20) to 4,800 won, starting Feb. 1. A small cafe latte will sell for 5,300 won, which is 6 percent more than its current price of 5,000 won.
Other drinks and baked goods will get more expensive by a similar rate.
“There was no choice but to raise prices due to multiple external factors, including higher rents,” said Chang Yoon-jeong, a director of Coffee Bean Korea.
She did not directly address the issue of a higher minimum wage, which has aroused controversy.
The Moon Jae-in administration implemented a new minimum wage rate of 7,530 won per hour starting this year, which is 16.4 percent more than last year’s minimum wage. Small businesses and franchisees have complained that the hike is hurting their businesses.
“I cannot say it is totally unrelated to the minimum wage hike, but it is definitely not the only reason we decided to raise the prices,” Chang added.
Other coffee franchises in Korea said they don’t have plans yet to raise coffee prices. Starbucks Korea said it doesn’t have such a plan, along with Tous Les Jours, which is run by CJ Group, and Angel-in-us, which is run by Lotte Group.
Fast food franchises raised prices starting last year.
KFC increased prices of 24 items by an average of 5.9 percent starting last year.
Sinjeon Tteokbokki, a spicy rice cake franchise, also raised prices on its tteokbokki menu by 5 percent. Premium gimbap (rice roll) franchise Kobongmin Gimbap raised prices on its menu by 300 won to 500 won.
Of 220,000 franchise operators in Korea, 10 percent run fried chicken shops, which have yet to raise prices.
“Starting this year, we have considered raising prices on our menu, but ever since the Finance Ministry announced on Jan. 11 that they would do a special investigation into the prices charged by fried chicken franchisees, we withdrew it completely,” said one industry insider.
“But I think the idea will come up again after March. It is not only because the headquarters wants it, but franchisee operators want it too,” the insider added.
“A lot of franchisees want to raise prices, but at the moment there isn’t much they can do,” said a representative of the Korea Franchise Association who asked for anonymity.
“But they will notice the higher wage bills by March and more operators will ask for price hikes,” the representative added.
Fast food operator TGI Fridays said it will stop giving out free bread starting this month.
Some fried chicken operators are threatening to stop giving out free sauces and pickled radish.
BY KIM YOUNG-JU [email@example.com]
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