[The Rise and Fall of Family Restaurants] Consumers Turn Away Due to Changing Trends and More Demanding Tastes

Changes in Population Structure Such as Unemployment, Marriage Rate, and Birth Rate Decline
Only Bleeding Competition Without Changing Junk Food Perception
Rapid Changes in Dining Trends Like Meal Kits... Unable to Keep Up

[Asia Economy Reporter Moon Hyewon] The reasons why family restaurants, which have led the dining-out industry for over 20 years, have declined can be analyzed into three factors: 'population changes,' 'health,' and 'rapid trend shifts.'

◆ Changes in population structure such as unemployment, marriage rate, and birth rate decline = Family restaurants have been on a downward path since the mid-2000s due to rapid changes in population structure caused by prolonged economic recession leading to unemployment, and declines in marriage and birth rates.

The proportion of single-person households has steadily increased from 15.5% in 2000 to 23.9% in 2010, 31.7% in 2020, and 33.4% last year. On the other hand, marriage and birth rates are rapidly decreasing. The total fertility rate by year was 1.24 in 2015, 1.17 in 2016, 1.05 in 2017, and dropped below 1 to 0.98 in 2018. It continued to plummet to 0.92 in 2019, 0.84 in 2020, and 0.81 last year.

As family units decrease and single-person households surge, family restaurants, where 3 to 4 people sit at one table and order menus costing at least 30,000 won, have become a burdensome dining-out option.

◆ Unable to change the perception of junk food, only engaged in cutthroat competition = Additionally, since the 2010s, as interest in health increased, family restaurant food gained a negative image as junk food (high-calorie unhealthy food), and it is evaluated that they failed to overcome this perception.

In the early 1990s, when overseas travel was difficult, family restaurants were popular as places where one could experience foreign cuisine in Korea, offering a special experience. However, as national income increased and overseas travel became frequent, family restaurants could no longer provide a unique experience. The reason to visit family restaurants disappeared.

Although alternative foods such as salads and Korean cuisine, categorized as 'well-being' foods, gained attention in the domestic dining industry, family restaurants stubbornly stuck to similar high-calorie menus like steak, pasta, and fried potatoes and shrimp for years, which is widely regarded inside and outside the industry as having fueled self-destructive cutthroat competition.

◆ Failure to catch rapidly changing dining trends such as meal kits = Above all, the industry is criticized for failing to keep up with changing dining trends. The spread of smartphones and the activation of social networking services (SNS) have made it easier to find information about popular restaurants compared to before. Consumers increasingly demand to seek out rare and new food experiences rather than easily accessible family restaurants.

As more individual restaurants offering cuisines from around the world?including Korean, Chinese, Japanese, Mexican, Arab, Indian, Vietnamese, Greek, and Italian?have gradually emerged, consumer visits have become more dispersed. Additionally, with the surge in single-person households, meal kits, which are cost-effective and convenient, have become a major trend, but family restaurants have no clear countermeasures for this, which is pointed out as a problem.

Professor Yeo Junsang of Dongguk University's Department of Business Administration diagnosed, "The biggest reason family restaurants failed at that time was that rigid marketing policies prevented them from keeping up with rapidly changing dining trends and from differentiating themselves."

Lee Kyunghee, director of the Korea Startup Strategy Research Institute, pointed out, "The dining industry experiences ups and downs according to trends, so you must prepare the next thing while you are doing well. Since family restaurants are places frequently visited by young people, they should have better captured and sensitively responded to their rapidly changing trends."

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