Rising Monthly Food Prices Again This Year, Next Year’s Bowl of Gukbap to Cost 10,000 Won

Domino Price Hikes Due to Raw Material Cost Surge
Flour Prices Rise Early in the Year → Ramen Prices Increase
Service Prices Also Rise Following New Year's Minimum Wage Increase
Men's Haircuts 30,000 Won... Tuition Fees Also Expected to Increase

Sundaegukbap [Photo by Getty Images Bank]

The prices of raw materials such as flour, sugar, and milk have surged sharply throughout this year and are expected to remain high next year, causing a crisis in living costs. Not only have prices risen continuously throughout this year, but a domino effect of price hikes is also anticipated to recur next year. Due to the impact of the minimum wage increase, prices of not only manufactured goods but also services have risen simultaneously, already placing a burden on the budgets of ordinary households in the new year.

Domino Price Increases Throughout the Year

Amid the prolonged COVID-19 pandemic, egg and milk prices surged domestically, while raw material prices such as flour and sugar soared in the international market. In the first half of this year, international wheat (flour) futures prices nearly doubled compared to last year, leading to a rise in flour prices. In August, most ramen companies including Ottogi, Nongshim, Samyang, and Paldo adjusted their prices upward by 6-11%. Around the same time, crude oil prices also increased by 2.3% (21 KRW), from 926 KRW to 947 KRW per liter.

The sharp rise in raw material prices led to increases in processed food prices. Starting with tofu and bean sprouts in January, followed by Hetbahn (ready-to-eat rice) in February, gochujang (red chili paste) in March, alcoholic beverages in May, ramen in August, milk in October, and chicken prices in November and December, major food companies engaged in a domino competition of price hikes.

The beverage industry's price increases in the new year reflect the rise in sugar prices. International raw sugar futures prices exceeded 19 cents per pound, rising more than 30% compared to the same period last year, pushing up prices of carbonated drinks with high sugar content. Lotte Chilsung Beverage raised the wholesale prices of 26 beverage products, including Chilsung Cider and Pepsi Cola, by an average of 6.8% starting from the 17th. This is the second price increase this year, following an average 4.7% hike in February. A representative from the sugar refining industry explained, "Retail sugar prices remain unchanged, but the supply volumes to beverage manufacturers are continuously adjusted according to market prices."

Sundaegukbap Approaching 10,000 KRW per Bowl

The rise in food prices has dealt a direct blow to self-employed business owners, and dining-out prices are also expected to rise significantly next year. This is because the minimum hourly wage will increase by 5.1% next year amid growing cost burdens.

Kim Jaegon (59, pseudonym), who runs a Sundaegukbap (Korean blood sausage soup) restaurant in Dongdaemun-gu, Seoul, decided to raise the price of Sundaegukbap from 8,000 KRW to 9,000 KRW starting January 1 next year. The price, which was 6,000 KRW five years ago, has increased by 1,000 KRW every two years and will reach 9,000 KRW next year. Kim said, "I myself think it's unreasonable for the soup to approach 10,000 KRW, but I cannot survive without raising the price. Labor costs and rent have been rising continuously for five years, so there is no choice but to increase prices."

Following last month, major delivery agencies are raising their fees one after another starting in January, putting direct pressure on the food service industry, which has seen increased delivery demand due to COVID-19. In some areas of Seoul, delivery fees recently increased from 4,000 KRW to 4,500 KRW and are expected to rise to 5,000 KRW next year.

Beauty Salons and Academies Also "Increasing Prices from January 1"

Franchise dining companies have reportedly begun sending official notices to franchisees about price adjustments starting from January 1 due to rising costs and other reasons. Typically, when franchise companies initiate price hikes, individual businesses in the same industry tend to follow suit. Choi Miyoung (37), who operates a salad franchise store, said, "I received a notice from headquarters to raise the basic menu prices by 1,000 KRW, but I am worried whether customers will still come at these prices."

Various service costs are also rising. A large franchise beauty salon in Mapo, Seoul, plans to raise men's haircut prices from 27,000 KRW to 30,000 KRW and women's haircuts from 30,000 KRW to 33,000 KRW, an increase of up to 10%, effective January 1. Among parents, there are growing concerns about receiving such messages. Texts informing that tuition fees for children's academies such as Taekwondo and art classes will increase by about 10,000 to 20,000 KRW per month starting next month are being sent continuously.

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