The Devastating Collapse of the Dining-Out Market... "Solutions Must Be Found from Consumers"

Korea Foodservice Industry Research Institute R&D Report
"Proactive Response to Changes in Consumer Behavior is Important"

[Asia Economy Reporter Choi Saeng-hye] A report has been released stating that the solution to overcoming the recession in the dining-out market, which is facing a crisis due to the spread of the novel coronavirus infection (COVID-19), the trend of eating at home caused by the increase in single-person households, and the rapidly growing home meal replacement (HMR) market, lies with the consumers.

On the 7th, Seo Yong-hee, Senior Researcher at the Korea Foodservice Industry Research Institute, stated in the institute's research and development (R&D) report titled "Find the Solution to Overcome the Dining-Out Market Recession from Consumers!" that "amid numerous changes inside and outside the dining-out market, one thing remains constant," adding, "the customer is the sole and ultimate focus of the dining-out market."

As the main values of society change, individual (customer) tastes and preferences have shown a tendency to diversify, individualize, and decentralize, making proactive and active responses to customer demands, reactions, and evaluations more important than ever.

Senior Researcher Seo emphasized, "Unlike before, unmanned kiosks take orders, robots cook food, and delivery agencies handle deliveries. Although the initial and intermediate processes may differ, the end (target and action) remains unchanged," adding, "Ultimately, how appropriately the customer is responded to will be the key indicator determining the survival of the dining-out market."

According to the "Consumer Policy Index (2019)" cited by Senior Researcher Seo from the Korea Consumer Agency, the consumer performance index for the dining-out service market (targeting general restaurants) was evaluated at 78.3 points, which is 0.7 points higher than the average for the entire service market, ranking 5th among 31 service markets. By evaluation item, choice diversity scored 77 points, ease of comparison 75.2 points, expectation satisfaction 74.5 points, reliability 73 points, and consumer complaints and damages 96.9 points. This indicates that dining-out consumers consider "choice diversity" the most important factor when using services in the dining-out service market.

However, comparing the evaluation results from 2015 and 2017, some evaluation items actually showed lower scores, and there was little significant improvement in individual evaluation items or performance indices. The rate of consumer complaints and damage experiences among dining-out consumers was 5.7%, ranking fourth highest among 31 service markets, and the rate of safety accident experiences was 2.7%, ranking second highest among 22 service markets.

These consumers generally perceived the dining-out service market as safe (7th place) but simultaneously showed high anxiety (2nd place). This is presumed to be because the main product of the food service market is food consumed directly, so although the frequency of accidents is not high, the scale of damage, such as health harm when accidents occur, is significant.

Senior Researcher Seo stated, "Currently, our dining industry is facing an unprecedented serious crisis that we have never experienced before, and unfortunately, there seems to be no way to overcome this crisis quickly or easily," but added, "That does not mean we can just sit back. Given the nature of the dining industry as a business that entertains customers, it is time for strenuous efforts to turn customers' footsteps back." He further added, "Understanding and reflecting the changed values and consumption behaviors of dining consumers, as well as consumers' evaluations of the dining service market, can be the best means to reduce trial and error."

This content was produced with the assistance of AI translation services.