Fast food more expensive as chains surrender to inflation
Fast food is becoming expensive food as inflation hits even the cheapest of options.
Lotteria, a hamburger fast food franchise, is the latest to give in to increasing costs.
Lotte GRS, which runs Lotteria, announced on Wednesday that it is raising the prices of its food products by an average 4.1 percent. The new prices go into effect on Dec. 1.
It is the second time Lotteria has increased prices this year. In February, it upped the prices of some products by an average of 1.5 percent.
Next month, 16 types of burgers, 12 kinds of chicken products, eight types of desserts and 10 different drinks will become more expensive, according to Lotte GRS.
Lotte GRS, which also runs Angel-in-us Coffee franchise, is 54.44 percent owned by Lotte Corporation.
The prices of Lotteria’s bulgogi burger and its fried shrimp burger will jump from 3,900 won ($3.5) to 4,100 won, up 4.9 percent. The set menu for the same burgers will rise to 6,200 won from the current 5,900 won, up 5.1 percent.
The company cited the rise in the minimum wage, supply chain disruptions and commissions for delivery apps as the reasons behind its latest decision.
Outback Steakhouse Korea has raised prices of its food products by an average 6.2 percent. The adjusted prices went into effect on Monday.
Twenty-four food products were subject to price increases. The price of Outback’s Black Label Steak went to 67,000 won from 54,000 won, up 24 percent, while the iconic Toowoomba pasta rose 13 percent to 25,900 won.
The Australian-themed restaurant last increased prices in October 2020.
BHC, which completed the acquisition of Outback Steakhouse Korea this month, said the price increase is due to upgrading of dishes and the rising prices of raw materials.
BHC, known for the BHC chicken franchise, acquired Outback Steakhouse Korea last week from SkyLake Equity Partners for around 250 billion won.
Kyochon F&B, Korea’s largest fried chicken chain, recently upped its prices by an average 8.1 percent. It was the first increase in seven years for Kyochon F&B.
The increase went into effect this week, and it ranges from 500 won to 2,000 won per item.
Kyochon Original fried chicken now retails for 16,000 won, up 6.7 percent.
Its price increase could affect other chicken chains, like BB.Q.
BB.Q last increased prices of its chicken products, by up to 2,000 won, in Nov. 2018.
Other food products are increasing in price, many in tit-for-tat fashion.
After Ottogi increased the price of its instant noodles by an average 11.9 percent in August, Nongshim, Samyang Foods and Paldo followed, pushing up the price of their food products.
In October, milk became more expensive in a similar manner.
After Seoul Dairy Cooperative raised milk prices by an average 5.4 percent from October, Maeil Dairies and Namyang Dairy Products followed.
Prices of raw materials increased due to the reduced global supply of grain last year due to Covid-19, according to Lee Sun-hwa, an analyst at KB Securities. The effect lasted through this year because it takes around six months for the supply constraints to be reflected in the selling price.
“Companies that preemptively increased their food product prices are expected to see their margin spread improve starting from the first quarter of 2022,” because the price increase for grains is expected to halt in late 2021 as inventories stabilize, Lee added.
BY JIN MIN-JI [email@example.com]