Same burger, two prices: Fast food delivery pricing schemes meet anger from consumers

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Same burger, two prices: Fast food delivery pricing schemes meet anger from consumers

Published: 22 Sep. 2024, 10:55 Updated: 23 Sep. 2024, 18:51

CHO YONG-JUN
cho.yongjun1@joongang.co.kr

Delivery drivers outside a Burger King restaurant in central Seoul [YONHAP]

Major fast food restaurants like McDonald's, Burger King and Lotteria have been introducing dual pricing, where the delivery menu prices are higher than the regular eat-in price.

The price difference may be an inevitable factor due to the delivery costs that restaurants must pay per order — but customers are expressing discontent with the system, saying that such price differences are not sufficiently communicated to them.

Fast food franchises have been either considering dual pricing or have already introduced dual pricing in their menus as of September. A Big Mac set from McDonald’s costs 1,300 won ($0.98) more on delivery platforms compared to ordering in-store. Burger King’s Whopper set costs 1,400 won more for delivery. Popeyes and KFC have been charging 300 won to 800 won more per item since April when ordered for delivery.

Lotteria was the latest player to join the trend, as the company said Monday that it would charge 700 won to 800 won more for burgers and 1,300 won more for sets when ordered through delivery platforms. Mom’s Touch is also considering implementing a similar pricing strategy.

Fast food franchises are citing delivery fees that the restaurants pay per order as the reason for such price differences.

When using major delivery platforms, such as Baedal Minjok — commonly known as Baemin — and Yogiyo, restaurants are first charged a commission fee of 9.7 percent to 9.8 percent of the total price of each order, plus a 1,900 won to 2,900 won delivery fee. This means that a 20,000 won order on Baemin results in around 6,000 won charged to the restaurant in service fees and delivery costs — making up nearly 30 percent of the total price.

“It may be the same menu but there are a lot of extra costs that [restaurants have to pay] when ordered as delivery,” a source in the local franchise industry said.

“There may be different pricing due to the difference in cost structure between eating in and ordering through delivery platforms.”

This is also why Mom’s Touch’s franchisee union asked the company to increase the menu prices on delivery apps in July.

But these varying prices are not welcomed by many consumers.

“I wasn’t aware of the difference in pricing when ordering delivery, compared to dining in,” an office worker, surnamed Kim, living in Eunpyeong District said. “They are charging us more without a clear explanation. I feel like I’m getting deceived.”

And it’s more common for restaurants to not tell the customers whether the restaurants were having dual pricing schemes. According to research conducted by the Korea Consumer Agency in 2023, 20 out of the 34 restaurants surveyed in Seoul had implemented dual pricing it its menus, but only seven of them were correctly notifying their customers of the price difference in menus.

“Restaurants should be clear when releasing pricing information so that customers can choose whether to use their delivery services, which are more pricey but also convenient, or order in store, where it's cheaper but less convenient,” a lawyer from the Korea Consumer Agency said.

“If the delivery prices are higher because they include delivery fees, restaurants should clearly label the price difference to guarantee the consumers’ rights to know,” Professor Hwang Jin-joo, an adjunct professor of consumer science at the Catholic University of Korea and Inha University said.

Franchisers and delivery service platforms are also currently in talks over the delivery fees charged to franchisees after Baemin announced a delivery fee hike in July.

Update, Sept. 23: Updated details on Lotteria's dual pricing.

BY OH SAM-GWON [cho.yongjun1@joongang.co.kr]