Just one in five restaurants in South Korea now serves a meal for less than 10,000 won ($7) per person, as dining-out prices keep climbing. Even staples such as kalguksu, a knife-cut noodle soup, and bibimbap have moved well above the 10,000-won mark. Consumers facing higher restaurant bills are turning to cheaper options such as convenience store ready-meals and fast food.
Among general restaurants serving Korean, Chinese, Japanese, Western and other foreign cuisines, those with an average spend per customer below 10,000 won accounted for 20.1% last year, according to a survey of restaurant operations by the Ministry of Agriculture, Food and Rural Affairs released on the 15th. That was down 3.3 percentage points from 23.4% in 2024. Restaurants with an average spend of 10,000 won to under 20,000 won rose 2.7 percentage points to 55.1% from 52.4% over the same period. Those in the 20,000-won to under 30,000-won range also increased, to 16.1% from 15.6%.
Dining-out prices have continued to rise this year. The average price of kalguksu in Seoul topped 10,000 won for the first time in March, according to price data from the Korea Consumer Agency. Gimbap prices in August rose 8.3% from a year earlier, and all eight major dining-out items tracked, including samgyetang and naengmyeon, posted gains.
The problem is that profitability is deteriorating even as restaurants raise menu prices. Average revenue at general restaurants was 289.31 million won last year, up 1.4% from 285.22 million won a year earlier. Average operating costs rose 1.7% to 263.78 million won from 259.26 million won, outpacing revenue growth. As a result, the operating profit margin fell 0.3 percentage point to 8.8% from 9.1%. With continued pressure from ingredient costs, wages and rent, as well as delivery app platform fees and packaging, further price increases cannot be ruled out.
As dining-out costs weigh on households, cheaper convenience store ready-meals and fast food are emerging as alternatives. Sales of ready-meals such as lunch boxes, gimbap and rice balls at GS25 convenience stores rose 18.1% last year from a year earlier, and the growth rate widened to 24.1% in the first half of this year, according to GS Retail. "Ready-meal sales during lunch hours have been rising steadily, to the point where people now talk about 'lunchflation,'" a GS Retail official said. "We are also carrying out renewals to innovate on quality and strengthen competitiveness in ready-meals."
The fast-food industry is also growing rapidly. McDonald's Korea posted revenue of 1.4313 trillion won last year, up 14.5% from 1.2502 trillion won a year earlier. Over the same period, revenue rose 12.4% to 1.1189 trillion won from 995.4 billion won at Lotte GRS, which operates Lotteria, and 14.6% to 479 billion won from 417.8 billion won at Mom's Touch & Company, which operates Mom's Touch. Revenue also climbed 12.5% at BKR, the operator of Burger King, and 29.3% at KFC Korea.
Coffee franchises are expanding food menus to capture meal demand. Mega MGC Coffee has introduced items such as toast and hot dogs, while Compose Coffee offers tteokbokki and fresh rolls. Tim Hortons sells salads and soups, and Coffee Bean carries burritos and sandwiches.
"With rising costs from ingredients to wages and various fees, it is hard to maintain profitability even after raising prices," an official in the restaurant industry said. "We are not happy that menu price increases are pushing consumer demand toward ready-meals, but because of cost pressures there is no option other than raising prices, so upward pressure on dining-out prices looks set to continue for some time."