[Exclusive] Tous Les Jours Increases Bakery Workers' Wages... Will Bread Prices Also Rise?

CJ Foodville Notifies Franchisees of 1.7% Increase in Contract Fees
National Pension Support for Bakers to End

Tous Les Jours has decided to raise the wages of bakers working at its franchise stores. Since rising labor costs are one of the biggest factors driving product price increases, it is expected that Tous Les Jours will soon raise the prices of some bread products.

According to the food industry on the 11th, CJ Foodville, which operates Tous Les Jours, recently agreed with the Franchisee Council to increase the bakers' wages (contract fees) by 1.7% and notified the store owners.

Bakers work not as direct employees of the stores but are dispatched from contracting companies. The monthly salary is paid by the contracting company after the store owners calculate the working hours and pay the contracting company, which deducts costs before paying the bakers. Tous Les Jours’ headquarters and franchisees share the contract fees at a certain ratio, and they have been negotiating wage adjustments, reaching an agreement recently.

Tous Les Jours

Along with this contract fee increase, CJ Foodville also announced that it will end the 4.5% support for the national pension contributions for store bakers. The explanation was that the labor costs for store bakers (basic salary, weekly holiday allowance, five major insurances, meal expenses, and other direct labor costs) are primarily the responsibility of the franchisees. This decision means that the headquarters’ support for store owners has been reduced.

With rising labor costs and the cessation of national pension support, the burden on franchisees is expected to increase further. Accordingly, franchisees are also expected to strongly demand product price increases from the headquarters. Although there may be limits to the headquarters accepting these demands, industry insiders believe that if the demands for price hikes from franchisees become overwhelming, the company will have no choice but to consider raising prices. Typically, labor cost increases, along with raw material cost increases, are major factors in product price hikes.

It is also expected to be influenced by the recent price increase by Paris Baguette, which is in the same bakery industry. Paris Baguette raised the prices of 96 types of bread and 25 types of cakes by an average of 5.9% starting the day before.

A CJ Foodville official said, "No price increases have been decided yet, but we are continuously reviewing the matter."

Meanwhile, the last price increase by Tous Les Jours was in September last year. At that time, Tous Les Jours raised prices by an average of 5.6%, mainly on gift yanggwa and manufacturer-purchased products.