S.Korean office workers hit convenience stores as ‘lunch-flation’ bites

By Jihoon Lee

SEOUL (Reuters) – Workplace employee Park Mi-won had by no means purchased her lunch from a comfort retailer, till her favorite lunch buffet lately raised costs by greater than 10% to 9,000 gained ($7) as South Korean inflation soared to a 14-year excessive.

“After the value rise, I went to comfort shops as an alternative, the place I assumed the costs had been cheap whereas meals additionally tasted good,” the 62-year-old mentioned. “So now I am going there two to a few instances every week.”

World meals costs surged 23% final month from a 12 months earlier than, based on an agricultural arm of the United Nations. The warfare in Ukraine has impacted provides of grains from there and Russia, and brought on vitality and fertiliser costs to soar.

Providing low cost instantaneous noodles, sandwiches and “gimbap” (rice rolls) for underneath $5, comfort shops are gaining in recognition as salaried staff like Park search methods to chop prices.

South Korean comfort store chain GS25 posted greater than 30% will increase in gross sales of instantaneous meals in January-Could versus a 12 months in the past.

Seeing rising demand, GS25 has additionally launched a brand new meal subscription service for workplace staff, which comes with worth reductions and deliveries on to workplaces.

Friends together with CU and 7-Eleven have seen related surges in demand, whereas Emart24 noticed a 50% bounce in lunch-box gross sales in areas with a lot of workplace blocks.

These positive aspects got here as the costs of restaurant dishes in South Korea rose 7.4% final month in contrast with a 12 months earlier, the quickest tempo in 24 years.

Dubbed “lunch-flation”, the value of beloved dishes comparable to “galbitang” (beef stew with rice) jumped 12.2% and “nengmyun” (chilly noodles) rose 8.1%, based on authorities statistics.

Whereas comfort retailer lunches haven’t been immune from rising prices, their a lot decrease general costs have helped them acquire in recognition.

Across the capital Seoul, common nengmyun costs lately broke above 10,000 gained, based on Korea Client Company knowledge, whereas instantaneous ramen noodles are nonetheless obtainable at barely above 1,000 gained at comfort shops.

The Financial institution of Korea estimates every 1% worth rise in imported agricultural merchandise will push up processed meals costs by 0.36% within the subsequent 12 months and restaurant costs by 0.14% in subsequent three years.

Some operators say diners ought to anticipate greater worth hikes.

“As a matter of truth, I would like to boost the value even greater,” mentioned Lee Sang-jae, who runs a galbitang restaurant in Seoul’s central district and has already raised costs twice this 12 months, to 12,000 gained from 10,000.

“As an alternative, I’m giving up a few of my revenue margin, as I even have to contemplate workplace staff’ mild wallets today.”

In a survey by a human sources agency Incruit final month, 96% of 1,004 workplace staff mentioned they now discovered lunch costs burdensome. Amongst these, nearly half had been in search of methods to chop lunch spending.

However in South Korea, lunchtime has been regarded sacred amongst workplace staff, who usually mingle with pals and colleagues for longer than the allotted hour at busy diners.

“It’s less expensive than going to a restaurant, however the draw back is we can not have lunch altogether right here,” mentioned Ku Dong-hyun, 28, chomping on gimbap and ramen noodle from a GS25 for his Friday lunch.

Whereas many small eating places are nonetheless benefiting from a bounce-back in night eating after months of COVID-induced social distancing guidelines, economists warn extended stress on client costs will weigh on consumption.

“Actual buying energy is shrinking amid fierce inflation pressures, however individuals do not wish to minimize down night gatherings they only began, whereas on lunches they will,” mentioned Lee Seung-hoon, chief economist at Meritz Securities.

“As high-marching client costs last more and longer, it is going to begin to weigh on non-public consumption, and when it does, along with worsening exterior situations for exports, it is going to elevate questions in regards to the central financial institution’s aggressive financial tightening that we’re seeing now.”

($1 = 1,284.3200 gained)

(Reporting by Jihoon Lee in Seoul, extra reporting by Do Gyun Kim and Dae-woung Kim; Modifying by Lincoln Feast.)