December Last Year 10.6 Trillion Won... 30% Increase YoY
Record High Number of Businesses, Market Expansion
The domestic dining-out market, which was hit hard by COVID-19, has grown to an all-time high level as we enter the endemic era. As suppressed consumption due to social distancing exploded, monthly sales in the dining-out industry exceeded 10 trillion won in December last year, and the number of dining-out businesses also reached an all-time high, expanding the overall dining market.
According to the Korea Agro-Fisheries & Food Trade Corporation (aT) on the 21st, the total monthly sales of the dining industry recorded a record high of 10.6483 trillion won in December last year. This amount represents an increase of 10.81% from 9.6098 trillion won in the previous month and 30.09% from 8.1855 trillion won in the same month of the previous year.
December is generally considered a peak season in the dining industry due to Christmas, year-end and New Year’s events, and year-end parties. However, with the strengthening of social distancing policies due to COVID-19, dining industry sales in December 2020 sharply dropped to 5.5831 trillion won, nearly half of the previous year.
After the gradual easing of social distancing, December last year saw an 8.27% increase compared to December 2019 (9.8348 trillion won), before social distancing measures were implemented, showing signs of recovery in daily life. This is interpreted as consumers who had refrained from dining out and going out due to social distancing dramatically increasing their dining consumption in patterns such as ‘revenge spending’ following the easing and lifting of restrictions.
The sales figures are estimated based on dining establishment sales data from Shinhan Card, estimating the total card sales amount for the dining industry. Payments made through delivery apps and cash payments were not included in the estimate.
In fact, representative industries benefiting from the year-end special season all saw increased sales (excluding delivery app sales counts) compared to 2019, when social distancing began. Western-style dining increased by 95.7 billion won (28.7%) over three years, dance entertainment bars by 16 billion won (24.9%), bakeries by 67.5 billion won (20.3%), and general entertainment bars by 42.8 billion won (19.5%). These industries are interpreted to have increased sales influenced by year-end gatherings and Christmas.
The increase in the number of dining businesses to an all-time high over the past three years also appears to have contributed to the overall increase in domestic dining market sales. As of December last year, the number of dining businesses was 728,283, up 5.2% (35,970 businesses) from December 2019.
Kim Sam-hee, head of research at the Korea Foodservice Industry Research Institute, explained, "As Korea’s economic structure became difficult due to the contraction of industries such as travel, tourism, and shipping during COVID-19, wage workers who were pushed out onto the streets due to restructuring or layoffs moved into the dining self-employment sector, which has the lowest entry barriers, causing the number of dining businesses to increase to an all-time high. Even though the overall dining market has grown, the increase in the number of businesses has led to excessive competition, which may lower the profitability of individual businesses."
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