Dining Sector Rebounds, but Only Gimbap and Tteokbokki Saw Strong Sales

In the first quarter of this year (January to March), the dining-out sector experienced a rebound, driven by frequent gatherings at the beginning of the year and the special demand during the Lunar New Year holidays. However, as demand for low-priced dining continued amid significant cost burdens caused by factors such as the aftermath of the Iran war, experts are describing the situation as a "low-intensity recovery," where perceived business conditions and profitability have yet to recover.

According to the "1st Quarter Dining Industry Business Index" recently released by the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corporation (aT) on April 18, the current index for the first quarter of this year stood at 76.78, up 1.69 points from the previous quarter.

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The Dining Industry Business Index is a metric calculated by surveying 3,000 dining establishments across the country. With 100 as the baseline, a score below 100 means that more establishments reported a sales decline compared to the same period last year than those reporting an increase.

This index declined from 76.76 in the third quarter of last year to 75.09 in the fourth quarter, but rebounded after just one quarter. Numerically, it is the highest level since the first quarter of 2024 (79.28) and is similar to the third quarter of last year, when consumer coupons for daily living support were issued. This is interpreted as being influenced by gatherings at the beginning of the year and the special demand during the Lunar New Year holidays.

By industry segment, most sectors-including Korean restaurants, Chinese restaurants, chicken specialty restaurants, gimbap and other snack bars, pubs, and non-alcoholic beverage shops-saw their indices rise compared to the fourth quarter of last year. In particular, as low-priced dining consumption increased, demand for takeout foods such as gimbap, dumplings, and tteokbokki grew. Furthermore, new beverage trends, such as Chinese-style milk tea, spread via social networking services (SNS), leading to a marked increase in the indices of related sectors.

The Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corporation (aT) announced the "Q1 Foodservice Industry Business Condition Index" on the 15th. The source of the data is the "Q1 Foodservice Industry Business Condition Index Report."

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On the other hand, institutional cafeterias and pizza, hamburger, sandwich, and similar restaurants saw their indices fall by 2.17 points and 5.77 points, respectively. The decline in institutional cafeterias is interpreted as being partly due to the concentration of holidays at the beginning of the year. For pizza, hamburger, sandwich, and similar restaurants, the drop is attributed to price resistance reaching its limit as both brand prices and delivery fees have risen.

The outlook index for the dining industry in the second quarter stands at 85.69, up 1.71 points from the previous quarter. This reflects expectations that demand for dining out will rise during Family Month, resulting in a slight increase in the index. Typically, the outlook index tends to be higher than the current business index, driven by optimistic expectations for the future. The outlook index is at its highest level since the second quarter of 2024 (87.34).

Jin Hyunjung, professor at Chung-Ang University's Department of Economics, stated in the report, "On the surface, the dining industry appears to be on the path to recovery, but one should be cautious about concluding that it is a 'recovery' based solely on the numbers." She added, "Compared to the peak reached during the reopening period in 2022, the current level is still low, and although the index is rising, the industry remains stagnant." She analyzed that while the index is improving, the actual business climate and profitability are not recovering, describing the situation as a "low-intensity recovery."

Professor Jin pointed out that dining establishments are facing high cost burdens and are caught in the dilemma that raising prices leads to decreased demand. She also noted that the recovery is uneven across industry segments, indicating the early stage of an unbalanced recovery. She concluded, "The current rebound is likely a temporary improvement resting on an unstable equilibrium, rather than a stable recovery."

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