container
Dim
The Secret of Bread Prices

Picked Up a Franchise Cream Bread and Gasped... Why Do Prices Differ by Neighborhood?


Editor's NoteAccording to consumer price trends released by Statistics Korea, while the price of processed foods rose by 4.1% in May (compared to the same period last year), bread prices surged by 6.4%. The consumer price index for bread reached 138.48, which means it has increased by 38.48% over the past five years compared to the base year of 2020 (100). This rise is steeper than that of other popular Korean snacks such as tteokbokki and fried chicken. Bread, which was once a snack enjoyed by everyone, has now become something that is difficult to choose due to its high price. How did bread prices in Korea end up rising so sharply?
Picked Up a Franchise Cream Bread and Gasped... Why Do Prices Differ by Neighborhood? 원본보기 아이콘

Franchise Bread Prices Vary... Mokdong Branch: 1,900 KRW vs. Euljiro 3-ga Branch: 2,300 KRW

Office worker Lee Goeun (32) stopped in her tracks when she saw the price while trying to buy her usual cream bread at the Tous Les Jours store at Euljiro 3-ga Station in Seoul after work. She felt the price was higher than at the store near her home. At the store near Mokdong Station where Lee lives, the cream bread was 1,900 KRW per piece, but at the store near her office, the same product was being sold for 2,300 KRW.Lee said, "I never expected prices to fluctuate this much between stores, even for the same brand of bread," and added, "As a consumer, I naturally assume franchise stores will have the same prices, so seeing different prices is quite confusing."


It was found that even products from the same large franchise bakery have different prices depending on the store. Legally, under the Fair Trade Act, there is no issue with this system since the final selling price can be set autonomously by the store owner rather than the headquarters. However, consumers who are unaware of this have voiced confusion.


It was found that even products from the same large franchise bakery have different prices depending on the store.
It was found that even products from the same large franchise bakery have different prices depending on the store.
In particular, areas with high foot traffic tend to have higher fixed costs such as rent, resulting in relatively higher bread prices.
The reason why the price of the same brand's bread varies by store is that the authority to set the final selling price lies with the store owner.

On July 5, a survey of bread prices at several stores in Seoul belonging to major franchise brands such as Paris Baguette (Paris Croissant) and Tous Les Jours (CJ Foodville) confirmed that the same products are sold at different prices depending on the store. In particular, areas with high foot traffic tend to have higher fixed costs such as rent, resulting in relatively higher bread prices.


Prices Also Vary by Rent and Commercial District Characteristics... More Expensive in Areas with High Foot Traffic

At Tous Les Jours, the price of red bean bread and soboro bread was 1,900 KRW each at the Mokdong Seunghee branch, but 2,000 KRW at the Euljiro 3-ga Station branch, and 2,100 KRW at the Myeongdong Station branch. The price difference for cream bread was even greater: it was 1,900 KRW at the Mokdong Seunghee branch, 2,300 KRW at the Euljiro 3-ga Station branch, and 2,500 KRW at the Myeongdong Station branch, showing a maximum difference of 600 KRW between stores.Baked cakes also showed price differences: Jeju First Harvest Green Tea Castella was sold for 15,000 KRW at the Mokdong Seunghee branch, 16,000 KRW at the Myeongdong Station branch, and 17,000 KRW at the Euljiro 3-ga Station branch.

It was found that the price of the same bread product varies depending on the store. Photo by Midam Heo

It was found that the price of the same bread product varies depending on the store. Photo by Midam Heo

원본보기 아이콘

Even at stores of the same brand located just a few hundred meters apart, the same bread can have different price tags. Paris Baguette's Chungmuro Station branch and Myeongdong Baek Hospital branch are about 500 meters apart in a straight line, but at the Myeongdong Baek Hospital branch, 'Almond Financier' and 'Choco Financier' are each sold for 1,900 KRW, while at the Chungmuro Station branch, they are sold for 2,000 KRW. Products such as Myungga Chapssaltteok, Mr. Bear, and Miss Bear are also 100 KRW more expensive at the Chungmuro Station branch.


The reason why the price of the same brand's bread varies by store is that the authority to set the final selling price lies with the store owner. An industry insider from the franchise sector explained, "We provide a suggested retail price as a guideline, but the actual price is determined by the store owner, who takes into account factors such as rent and other costs," and added, "If prices were forcibly standardized, it could actually constitute a violation of the Fair Trade Act."


Final Selling Price Is Up to the Franchisee... Consumers Assume 'Uniform Pricing'

According to Article 29 of the Fair Trade Act (Restrictions on Resale Price Maintenance), it is generally prohibited for franchise headquarters to force franchisees to set specific selling prices. This rule is intended to prevent the headquarters from unilaterally controlling distribution prices or engaging in price collusion. Typically, store owners set the final selling price of bread by considering each store's rent, labor costs, management expenses, and characteristics of the commercial district.


Because franchise stores receive ingredients and semi-processed products from the same manufacturer, consumers often assume that product prices will be the same everywhere, and are surprised to see price differences. On an online community, people shared advice such as, "Not only bread, but the prices of drinks, salads, and all product categories differ by store," and "I try to go to the oldest, most worn-out stores because newly renovated stores seem to have higher bread prices."


Office worker Song Naeun (30) said, "I didn't know prices would differ even at the same franchise," and added, "In the end, depending on where you buy the exact same product, you could lose out, so I'll be more careful in the future." She also said, "Even a difference of a few hundred won makes a big difference for consumers, depending on whether you know about it or not."

top버튼