[Matjalal X File] Every 6 Months 'Price Increase'... Burgerflation Leader 'McDonald's'

The Most Frequently Visited Place Recently is McDonald's
The Highest Price Increase is for KFC A La Carte and McDonald's Set
Unavoidable Price Hike Accompanied by a Sharp Rise in Operating Profit

Editor's Note[Matjalal X-Files] uncovers misunderstandings and truths about food.

Kimbap and hamburgers. These are the menu items with particularly notable price increases amid the soaring dining-out prices known as 'lunchflation.' According to Statistics Korea, the consumer price index for kimbap in July was 133.12, and for hamburgers, it was 131.02. Among dining-out menus, only these two exceeded 130, meaning their average prices have risen more than 30% compared to the base year 2020.

In fact, the rising price of kimbap is understandable. Seaweed exports are booming to the extent that seaweed is called the 'black semiconductor,' and abnormal weather has made seaweed supply difficult, causing prices to jump. But what is the reason for the rapid increase in hamburger prices?

'Domino Effect of Hamburger Price Increases'... The Most Frequent Raiser is 'McDonald's'

Let's examine the fundamental causes step by step, but for now, the price hikes are mainly driven by large franchise companies. Nowadays, there is no hamburger franchise that hasn't raised prices. This year alone, No Brand Burger raised prices in February, McDonald's in May, KFC in June, and recently Lotteria joined this trend.

As a result, hamburgers are no longer a 'light meal.' Let's look at the prices of each company's signature menu. McDonald's Big Mac set costs 7,200 KRW, Lotteria Bulgogi Burger set 7,100 KRW, Burger King Whopper set 9,100 KRW, Mom's Touch Cyber Burger set 6,900 KRW, and KFC Zinger Burger set 7,900 KRW.

Actually, the increase is only a few hundred won?about 100 won at the least and up to 400 won at most. However, the reason hamburger prices no longer feel light might be the short intervals between price hikes. While the usual price increase cycle used to be one year, it is clearly shortening these days.

We analyzed the price increase intervals of major hamburger franchises. The shortest and most frequent increases were at McDonald's. From 2022 to this year, McDonald's raised prices five times: February 2022 → August 2022 → February 2023 → November 2023 → May 2024. Most increases occurred every six months.

Next is KFC, which raised prices four times: January 2022 → July 2022 → February 2023 → June 2024. Mom's Touch also raised prices four times: February 2022 → August 2022 → March 2023 → October 2023, but there has been no change for 10 months since the last increase. Mom's Touch says, "There are no plans to raise prices for the time being."

The Hamburger with the Highest Price Increase Over 10 Years... Single Item: KFC Zinger Burger, Set: McDonald's Big Mac

So, how much have hamburger prices increased over the past 10 years? Excluding No Brand Burger, which did not exist 10 years ago, we compared the prices of the signature menus of five companies for single items and sets.

For single items, KFC leads with the highest increase. The Zinger Burger price rose from 4,000 KRW in 2014 to 5,900 KRW in 2024, a 47.5% (1,900 KRW) increase. Next is Lotteria Bulgogi Burger, which increased from 3,300 KRW to 4,800 KRW, a 45.5% (1,500 KRW) rise. Others include Mom's Touch Cyber Burger at 43.8% (1,400 KRW), Burger King Whopper at 42% (2,100 KRW), and McDonald's Big Mac (1,400 KRW) at 34.1%.

For sets, McDonald's had the highest increase. The Big Mac set rose from 5,300 KRW in 2014 to 7,200 KRW in 2024, a 35.8% (1,900 KRW) increase. Lotteria Bulgogi Burger set increased from 5,300 KRW to 7,100 KRW, a 34% (1,800 KRW) rise, followed by Burger King Whopper set at 28% (2,000 KRW), Mom's Touch Cyber Burger set at 27.8% (1,500 KRW), and KFC Zinger Burger set at 21.5% (1,400 KRW).

"So, what exactly is the reason hamburger prices have risen especially more?"

We asked each franchise why hamburger prices have increased. They all said in unison: delivery fees, labor costs, logistics costs, electricity, gas, raw material price increases...

But these factors apply to all dining-out price increases. So how can we explain the particularly high hamburger price index? Most companies hesitated. There is no special reason like with kimbap. However, they said the 'originally low price' caused an optical illusion. Because hamburger prices were cheaper than other dining-out prices, even the same amount of increase looks like a bigger percentage rise.

This explanation is somewhat convincing but leaves a lingering discomfort. Perhaps it is due to the performance of hamburger franchises that have noticeably improved their operating profits along with price increases.

Last year, Lotteria's operator, Lotte GRS, recorded an operating profit of 20.8 billion KRW, 12 times the 1.7 billion KRW from the previous year. BKRL, which operates Burger King, had an operating profit of 23.9 billion KRW, a 205% increase from 7.9 billion KRW the year before. Mom's Touch & Company, operating Mom's Touch, also increased operating profit by 15% to 60.3 billion KRW from 52.4 billion KRW the previous year. McDonald's posted an operating loss of 20.3 billion KRW despite record-high sales, but the deficit was much smaller than before. Without about 60 billion KRW paid as royalties to the U.S. headquarters, which has been criticized as excessive, McDonald's would have had an operating profit in the 40 billion KRW range.

While explaining that price increases were inevitable, seeing hamburger franchises increase their operating profits leaves consumers with lighter wallets in this high inflation environment feeling somewhat bitter.