Budget bites break bank as inflation hits downmarket eateries
Low-cost meals that are go-tos for students, harried businesspeople and the broke and strapped are no exception.
In Seoul, the average price of a bowl of kalguksu noodle soup — the quintessential budget bite — is now over 8,000 won for the first time, up 8.8 percent on year.
The average bowl of naengmyeon cold noodles, popular during the summer, is nearing 10,000 won, up 9.7 percent year-on-year.
According to the Korea Consumer Agency, the prices of popular dishes, including kimchi-jjigae, bibimbap, samgyetang, samgyeopsal and jjajangmyeon, are all up.
Of the eight meals the consumer agency closely monitors, all are up more than 5 percent other than samgyeopsal and samgyetang.
The food items tracked are not high-end meals but accessible and affordable meals.
As the prices the agency tracks are averages, actual prices paid by consumers could be higher in some areas where commercial rents are high.
The rise in food-ingredient prices played a major role. Other factors may have contributed to the sharp rises, including higher labor costs and high demand.
Many restaurants have held back on price increases for a number of years due to the pandemic. They are now making up for lost time.
Myeongdong Gyoja is one such restaurant.
In February, it started selling kalguksu at 10,000 won, up 1,000 won.
Michelin-listed restaurants have also upped prices of their signature dishes by 1,000 won. A bowl of nyeongmyeon at Bongpiyang now costs 15,000 won, while Pildong Myeonok sells for 13,000 won.
According to Statistics Korea, the cost of dining out was up 6.6 percent in March on year, the fastest increase in 24 years.
All of the 39 meal items that the statistics agency tracks are more expensive.
Galbitang is 12 percent more expensive, juk 11 percent, hamburgers 10.4 percent and hoe 10 percent.
Cafeteria meals are 3.3 percent more expensive.
Beer prices were up 3.2 percent and soju prices 2.8 percent.
"As the economy is recovering from Covid-19, more people want to dine out," said Chon Sora, a Korea Development Institute (KDI) research fellow. "The increase in raw material prices also was a major reason behind the rise in restaurant prices."
Unlike grocery prices, once a restaurant raises prices, it's difficult to lower them.
Underlying inflation pressures are not seen easing anytime soon.
In the last six consecutive quarters, international grain prices have been pushing up prices not only of Korean food products but also farm feed.
The Korea Rural Economic Institute projects prices of imported grain for consumption to increase 10.4 percent in the second quarter compared to the first three months of the year. The price of imported grain for livestock feed is expected to rise 13.6 percent during the same period.
The think tank cited Russia's invasion of Ukraine and the depreciation of the won against dollar.
"Likely there will be additional increases of people dining out once the government relaxes its Covid-19 distancing regulations," Chon at the KDI said. "Amid the costs of ingredients rising, once the current stockpiles are used up, costs will rise for restaurants making new purchases."
BY SOHN HAE-YONG [firstname.lastname@example.org]