"Sandwich 10,000 Won" Fierce Dining Prices Meet COVID-19... "Harsh in This Situation"

[Asia Economy Reporter Lee Seon-ae] Prices of dining-out menus are soaring rapidly. Franchise headquarters in the dining-out sector cite the need to improve franchisee profitability through price adjustments amid increasing burdens such as labor costs and rent, compounded by the unforeseen variable of the novel coronavirus infection (COVID-19). However, consumers are sending uncomfortable glances, questioning whether price hikes are truly necessary during these difficult times for the entire nation due to COVID-19.

◆Flood of Price Increases in Dining-Out Franchises "Criticism for Sneaky Hikes Taking Advantage of COVID-19"= The era of 10,000 won sandwiches has officially arrived. According to related industries on the 8th, Subway will raise prices on some menu items starting the 10th. The price increases apply to 24 types of sandwiches, 6 types of additional options, and salads.

First, among the total 36 sandwich types (18 of 15cm, 18 of 30cm), prices for 24 types will increase. For 15cm sandwiches, 10 out of 18 types will rise by 100 to 200 won each, with an average increase rate of 1.13%. For 30cm sandwiches, 14 out of 18 types will increase by 100 to 400 won each, with an average increase rate of 2.48%. As a result, some products will easily exceed 10,000 won for the 30cm size.

Ten types including Meatball, BLT, Italian BMT, Turkey, Subway Club, Chicken Teriyaki, Spicy Italian, Steak & Cheese, Turkey Bacon Avocado, and Shrimp will see price increases of 100 to 400 won for both 15cm and 30cm sandwiches. Four types?Rotisserie BBQ Chicken, Roasted Chicken, Subway Melt, and Pulled Pork?will have no price change for 15cm sandwiches but will increase by 400 won for 30cm sandwiches. Four types?Egg Mayo, Ham, Tuna, and Veggie?will have prices frozen for both 15cm and 30cm sandwiches.

Among additional options, 6 out of 8 types including extra meat, extra egg mayo, extra omelet, extra avocado, extra pepperoni, and extra cheese will increase by 100 to 200 won. Salad add-ons will rise from 1,500 won to 1,700 won, a 200 won increase.

A Subway representative explained, "Due to continuous increases in labor costs, rent, and ingredient costs, we had no choice but to adjust prices on some menu items to improve franchisee profitability," adding, "We raised prices minimally only on items where adjustment was unavoidable to lessen the burden on customers."

Earlier, Maizen adjusted some sandwich prices starting the 1st. Ham, ham & cheese, strawberry, and chocolate flavors increased by 200 won, while cheese flavor rose by 300 won. Maizen explained, "Due to continuous increases in raw material and labor costs, operating management became difficult, so we adjusted prices." Hongruizen implemented price hikes on some sandwich products starting February 1st, raising prices by 300 won each. The items increased were Original Ham Sandwich, Ham & Cheese Sandwich, and Cheese Sandwich. Hongruizen stated, "Since starting franchise operations in May 2018, we have tried to maintain reasonable prices for 1 year and 9 months, but labor costs rose by about 14% during the same period, and raw material and logistics costs also increased by about 10%, making price increases unavoidable."

Consumer reactions are cold. University student Lee So-jin said, "Many places practice win-win management with franchisees by supporting supplies and reducing royalties, so I don't understand why prices must be raised during these difficult times," criticizing, "They only use the excuse of improving franchisee profitability but it seems like a trick for the headquarters to fatten their own profits." Office worker Kim Yeo-kyung also said, "If the goal is to improve franchisee profitability, there must be other ways; price hikes just shift the burden to consumers," raising her voice, "It can only be interpreted as a sneaky price increase taking advantage of the chaos caused by COVID-19."

◆7,000 Won for Kalguksu, 9,000 Won for Naengmyeon... Dining-Out Costs Expected to Rise in February= Prices of popular dining-out menus in January also soared. Now, in the Seoul area, a bowl of kalguksu costs 7,000 won, and naengmyeon costs 9,000 won.

According to the Korea Consumer Agency's comprehensive price information portal, Chamgagaek, prices of 7 out of 8 representative dining-out items frequently enjoyed by consumers in Seoul rose over the past year.

First, naengmyeon, which averaged 8,962 won per bowl in December last year, rose to 9,000 won in January. Compared to the same month last year, it increased from 8,846 won by 1.7%. Kalguksu, which surpassed 7,000 won in December last year, rose slightly to 7,077 won in January, a sharp 4.6% increase compared to 6,769 won in the same month last year.

Jajangmyeon, which surpassed 5,000 won since October last year, rose slightly to 5,154 won in January. It increased by 7.2% from 4,808 won a year ago, making it the item with the steepest price rise.

The price of one gimbap roll was 2,408 won, up 1.6% from 2,369 won a year ago. Samgyetang was 14,462 won, unchanged from the previous month but slightly up 1.1% from 14,308 won a year ago. Kimchi stew set meal and bibimbap were priced at 6,462 won and 8,769 won respectively, up 3.1% and 0.4% from 6,269 won and 8,731 won a year ago.

Samgyeopsal (200g) was 16,701 won, up from 16,235 won in December last year, but down 0.9% from 16,865 won a year ago. This is attributed to increased pig farming and the impact of African Swine Fever (ASF), which caused samgyeopsal prices to decline.

Price differences by region were also significant. Naengmyeon was most expensive in Seoul (9,000 won) and cheapest in Jeju (7,000 won), a 2,000 won difference. Bibimbap was most expensive in Seoul at 8,769 won, nearly 2,000 won more than the cheapest in Gyeongnam (6,800 won). For kimchi stew set meals, Jeju was the most expensive at 7,625 won, and Daejeon the cheapest at 6,100 won.

Samgyeopsal prices differed by more than 4,000 won between Seoul (16,701 won) and Gangwon-do (12,000 won). Jajangmyeon prices varied by 850 won between the cheapest in Gyeongnam (4,900 won) and the most expensive in Jeju (5,750 won). Samgyetang was most expensive in Seoul (14,462 won) and cheapest in Chungbuk (12,143 won). Kalguksu was cheapest in Daegu (5,750 won) and most expensive in Jeju (7,625 won). Gimbap was most expensive in Gyeongnam (2,430 won) and cheapest in Chungbuk (2,000 won).

The problem is that this trend is expected to continue into February. It is anticipated that the impact of COVID-19 will be reflected in February's dining-out costs, leading to continued price increases.

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