No Brand Burger, Average Price Increase of 3.1%
Industry Sees Price Hike as Inevitable Due to Rising Raw Material and Labor Costs
Shinsegae Food's No Brand Burger has drawn attention to movements in the burger industry as it became the first hamburger franchise this year to raise prices.
According to industry sources on the 29th, Shinsegae Food will raise the selling prices of about 30 items, including burgers and side menus sold at No Brand Burger, by an average of 3.1% starting today. Shinsegae Food stated that due to increasing costs for operating No Brand Burger stores?such as raw material costs, auxiliary material costs, logistics costs, labor costs, and public utility fees?it was unavoidable to raise prices by 100 to 400 won to preserve franchisees' profits. With this adjustment, the price of the signature menu item, the ‘NBB Signature (single item),’ will be adjusted from 4,400 won to 4,800 won.
A Shinsegae Food representative said, “Due to the rising various costs involved in operating No Brand Burger stores, we reluctantly adjusted prices to protect franchisees' profits while minimizing the increase to reduce the burden on customers. Moving forward, we will strive to enhance operational methods that can improve the headquarters' purchasing competitiveness and store operation efficiency so that consumers can enjoy the cost-effectiveness, which is the concept of No Brand Burger.”
While No Brand Burger has taken the lead, other burger franchises currently have no plans to raise prices. However, the price increase cycle in the hamburger franchise industry has been gradually shortening. Previously, McDonald’s raised prices by an average of 5.4%, increasing 100 to 400 won per menu item in February last year, and applied a 3.7% increase to some menus again in November, just eight months later. McDonald’s explained that the price hikes were due to rising raw material and logistics costs. Mom’s Touch also raised prices twice last year. After raising prices in August 2022, Mom’s Touch increased prices on 43 items, including hamburgers, by an average of 5.7% in March last year, seven months later, and raised prices again in November, seven months after that, citing increased chicken breast supply costs.
Other companies such as Lotteria (February), KFC (February), and Burger King (March) raised prices only once last year, but over the past three years, Lotteria and Burger King each raised prices four times, and KFC three times, showing that the five major companies raised prices an average of 3.8 times over three years. Some voices suggest that since it has been almost a year since these companies last raised prices, they are likely internally weighing the timing of the next increase.
The industry holds the view that periodic price increases are inevitable amid ongoing inflation in raw materials and other costs. However, some criticize that the shortening price increase cycle reflects a tendency to shift the burden onto consumers through price hikes rather than suppressing price increases through efficient cost management.
Meanwhile, as hamburger franchises, which offer relatively inexpensive meals, continue to raise prices, consumers are feeling a heavier financial burden. According to the National Statistical Portal of Statistics Korea, the consumer price index for dining out last year was 117.38, up 6.0% from the previous year (110.71). Based on 2020 (100.00), this marks three consecutive years of increase.
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