Goobne and Popeyes Raise Prices on Some Products
Impact of Rising Raw Material, Labor, and Delivery Fees
Possibility of Similar Competitors Increasing Prices Also Open
Some chicken and burger franchises, including Goobne and Popeyes, have raised their prices following the 22nd National Assembly general election. The reason cited is the significant increase in raw material costs, energy expenses required for store operations, labor costs, and rent, making it difficult to bear the burden. While competitors in the same industry have drawn a line, stating they have no plans to raise product prices yet, industry observers believe it is only a matter of time before they join the price hike trend. There is also a possibility that the price increase movement triggered in the dining industry will spread throughout the food industry.
According to the related industry on the 15th, Goobne simultaneously raised the prices of nine chicken products by 1,900 won each starting that day. The price of the representative menu, Gochu Basasak, rose from 18,000 won to 19,900 won after the increase, approaching 20,000 won. The Original increased from 10,600 won to 17,900 won, Namhae Garlic Basasak rose from 19,000 won to 20,900 won, and Oven Basasak, Cheese Basasak, Galbi Cheonwang, Bulgum Chicken, Volcano, and Seasoned Hero also became 1,900 won more expensive.
This is the first time in two years since 2022 that Goobne has raised product prices. A Goobne official explained, "Due to continuous increases in raw materials, labor costs, delivery fees, and rent, the profitability of franchise stores has steadily deteriorated, making it inevitable to decide on price increases for some items."
Chicken brand Popeyes also decided to raise prices of chicken, sandwiches (burgers), desserts, and beverages by an average of 4% starting that day. The prices of the items subject to the increase rose by about 100 to 800 won compared to before. This is the first time in over two years that Popeyes Korea has raised menu prices. Previously, Popeyes entered the Korean market in 1994 but withdrew at the end of 2020, then re-entered in December 2022 and raised prices this time. Delivery product prices are even higher. Popeyes decided to apply prices for delivery menus about 5% higher on average than in-store sales prices. A Popeyes Korea official said, "Due to recent inflation, labor costs, and delivery fee increases, we were forced to adjust prices."
Other chicken and burger franchises that raised product prices last year may also raise prices further. Among the three major chicken companies, only Kyochon F&B, the operator of Kyochon Chicken, saw its operating profit increase by 738.5% year-on-year last year, while bhc and Genesis BBQ saw decreases of 15.2% and 13.7%, respectively. It is interpreted that Kyochon's price increase of 3,000 won for major products such as Original and Honey Combo in April last year was reflected in its performance.
bhc raised prices of products such as Bburinkle, Fried Chicken, and Gold King by an average of 12.4% in December last year. BBQ raised prices of major products such as Golden Olive Chicken, Seasoned Chicken, and Basakan Wings by 2,000 won each in 2022 but did not raise prices further. Instead, as raw material prices such as olive oil rose, it reduced the proportion of extra virgin olive oil to 50% starting in October last year.
In February this year, Shinsegae Food raised prices of about 30 items, including burgers and side menus sold at No Brand Burger, by an average of 3.1%, and Mom's Touch raised prices of four burger types, including Fillet Burger and Deep Cheese Burger, by an average of 5% in October last year. In addition, McDonald's raised prices of 13 products, including four burgers, one McMorning item, sides, and beverages, by an average of 3.7% in November last year, and Lotteria and Burger King also raised prices of major products such as Bulgogi Burger and Whopper by an average of 5.1% and 2.0%, respectively, early last year.
These franchises have stated they have no plans to raise prices further yet, but like Goobne and Popeyes, they are struggling due to rising raw material prices, labor costs, and delivery fees. An industry official said, "Franchise headquarters and stores have endured accumulated price increase factors so far," adding, "Even if they do not raise product prices immediately, it is only a matter of timing, and price increases are inevitable."
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