May 5, 2023
SEOUL – Consumer prices for hamburgers rose at the fastest clip in nearly 20 years, according to Statistics Korea data released on Thursday, after major franchise companies raised their prices on the back of increasing expenses on raw materials.
Hamburger prices rose 17.1 percent on-year last month, the highest jump since July 2004 when they increased by 19 percent.
In Korea, the inflation rate of hamburgers has been rising fast this year. Consumer prices for hamburgers in February rose by 7.1 percent and 10.3 percent in March.
Pizza prices have also been increasing in recent months. In January this year, consumer prices for pizzas went up by 8.8 percent, followed by 10.7 percent and 12 percent increases in February and March, respectively. In April, the inflation rate rose slightly to 12.2 percent, marking the highest increase since November 2008, when their prices spiked 13.2 percent.
The inflation rate of fried chicken products, which had been decreasing for seven months straight, also rebounded in April to 6.8 percent, up 1.6 percentage points from 5.2 percent in March.
Inflation rates of the three popular dining options were higher than the overall inflation rate in April, 3.7 percent, which was the lowest figure in 14 months.
“It is difficult not to raise their prices because of increasing prices for raw materials,” an industry official said on condition of anonymity.
The industry source added that franchise brands are trying to minimize price hikes in line with the government’s efforts to curb inflation. But he added how long companies can embrace increasing raw material prices is uncertain.
Last month, the Minister of Agriculture, Food and Rural Affairs held a meeting where the ministry met with officials from Korea’s major food and beverages franchises — including Starbucks, Lotteria, BHC and Kyochon F&B — and asked them to minimize price hikes.
How long the food franchises can cooperate with the government’s efforts to curb inflation, however, is in question. There could be more extensive price hikes, according to the industry.
“Their prices can increase more if companies think they can no longer bear the rising expenses of raw materials,” the source added.