BBQ "No Price Increase for the Time Being"

[Asia Economy Reporter Moon Hyewon] Genesis BBQ (BBQ) announced on the 15th that “it will not raise chicken prices for the time being.”

A BBQ official stated, “There are many factors driving price increases such as rising raw material costs, minimum wage, and delivery fees,” but added, “due to the surge in COVID-19 cases and the politically and socially turbulent period including year-end, New Year, and the presidential election, the headquarters will bear the cost increase factors as a way to share the burden.”

According to data from the Agricultural Observation Center, the price of corn, the raw material for frying flour, has risen about 72% compared to 2018, and recently, due to international supply chain instability, sea freight rates (based on the Shanghai Containerized Freight Index (SCFI)) have surged by as much as 327.5%. BBQ uses Spanish extra virgin olive oil, which is 4 to 5 times more expensive than regular frying oil.

According to data from the Minimum Wage Commission under the Ministry of Employment and Labor, the minimum wage increased about 41.5% from 10,147 KRW in 2017 (including weekly holiday allowance, statutory holidays, and based on 52 hours) to 14,366 KRW in 2022 (same basis), increasing labor costs.

With the recent increase in non-face-to-face consumption, the proportion of delivery has sharply increased, and the delivery app fees that franchisees must bear have also risen. The fee, which started at 3,300 KRW per order in 2018, has increased every year and currently stands at 4,500 KRW per order (varies by region and agency). BBQ predicts that delivery agency fees will increase further due to various factors such as the Serious Accident Punishment Act to be enforced from January next year and the minimum wage hike.

BBQ plans to continuously consult with the Companion Committee (hereinafter the Franchisee Council) to decide future pricing policies.

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