Only a 6% Increase? The Pitfall of Dining Out Expense Statistics

February Dining Out Price Index 107.39
Highest in 13 Years and 2 Months
Delivery Fees Not Reflected in Price Index
Gap Widens with Perceived Inflation

[Asia Economy Reporter Seo So-jung] Lee Ji-young, an office worker living in Seongbuk-gu, Seoul, was recently surprised when ordering galbitang through a delivery application. The price of galbitang rose 20% from 15,000 won to 18,000 won, and the delivery fee, which was previously 2,000 won, jumped 50% to 3,000 won. Lee said, "Including the delivery fee, the price of one bowl of galbitang is close to 20,000 won," adding, "I used to enjoy delivery food due to COVID-19, but with soaring dining costs, I now cook meals at home every time."

According to the National Statistical Office’s National Statistical Portal (KOSIS) on the 8th, the dining-out price index last month was 107.39, up 6.2% compared to the previous year, marking the highest level in 13 years and 2 months since December 2008. However, there is a prevailing opinion that the actual dining-out prices consumers feel are much higher. This is because delivery fees are not sufficiently reflected in the price index as non-face-to-face transactions have become more active due to COVID-19.

In fact, concerns about this issue were recently raised by the Bank of Korea. At the Monetary Policy Committee meeting held in January, one committee member mentioned that it is necessary to examine whether changes in household consumption behavior due to COVID-19 are adequately reflected in the price index. The member said, "With the recent increase in non-face-to-face transactions, delivery services have greatly expanded, but it is questionable how delivery service costs are reflected in the price index."

According to Statistics Korea, among the 39 dining-out items disclosed on KOSIS, only some include delivery fees in their prices. Statistics Korea reflects delivery fees for items like chicken and pizza, which are mainly delivered rather than consumed on-site, but does not separately reflect delivery fees for items like gimbap, which are mainly consumed in-store.

A Statistics Korea official said, "We ask business owners about the proportion of delivery and on-site sales in total sales and reflect the items with a large proportion," adding, "There are cases where total sales are not accurately known, and since circumstances vary by store, it is difficult to uniformly reflect delivery fees." They explained that delivery service costs are reflected in the consumer price index through some dining-out items with a high delivery service ratio and courier usage fee items.

Although the delivery ratio has greatly increased due to COVID-19, delivery fees are not separately classified among the 460 consumer price index items and are somewhat arbitrarily reflected in some dining-out items under personal services, leading to a gap between the prices consumers actually feel and the official price index.

In particular, concerns are rising that consumer burdens will increase further as dining-out costs continue to rise due to the Ukraine crisis. Franchise companies for hamburgers, pizza, coffee, and others have raised prices, and if the Ukraine crisis prolongs, soaring oil and grain prices are expected to intensify upward pressure on prices.

Experts advise that, as non-face-to-face transactions increase and consumer trends change, ways to reflect delivery fees in the consumer price index items should be sought. Professor Yang Jun-mo of Yonsei University’s Department of Economics said, "Due to limitations in index compilation, the price index cannot keep up with changing trends, causing a gap between the prices consumers feel and the official index," adding, "Even after the COVID-19 situation ends, the trend of changing consumption behavior is likely to continue, so it is necessary to consider reflecting this in statistics and for monetary policy authorities to respond proactively."

Lee Jung-hyun, head of the Price Trends Division at Statistics Korea, said, "We plan to reorganize the intermediate weights reflecting price index issues in the second half of 2023."

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