The Cream Bread I Used to Buy Made Me Hesitate... "Why Is the 1,900-Won Bread 2,500 Won Here?" [The Secret Behind Bread Prices]

Franchise Bread Prices Vary by Region
Prices Differ Depending on Rent and Commercial District Characteristics
Final Sale Price Is Determined by Franchise Owners
Consumers Assume Products Are Sold at 'Uniform Prices'

Editor's NoteAccording to the consumer price trends released by Statistics Korea, the price of processed foods rose by 4.1% year-on-year in May, while the price of bread increased by as much as 6.4%. The bread consumer price index reached 138.48, which is a 38.48% increase over five years compared to the base year of 2020 (100). This rise is steeper than that of other popular Korean snacks such as tteokbokki and fried chicken. Bread, once a snack enjoyed by everyone, has now become something that is difficult to choose due to its high price. How did the price of bread in Korea end up rising so sharply?

Lee Goeun, a 32-year-old office worker, stopped in her tracks when she saw the price of her usual cream bread at a Tous Les Jours store near Euljiro 3-ga Station in Seoul on her way home from work. She felt the price was higher than at the store near her home. At the Mokdong Station branch near her residence, the cream bread was 1,900 won per piece, but at the store near her office, the same product was being sold for 2,300 won.Lee said, "I didn’t expect such price fluctuations depending on the store, even though it’s the same brand of bread," and added, "From a consumer’s perspective, I naturally assume the price will be the same at all franchise stores, so seeing different prices is confusing."

It was found that even products from the same major franchise bakery chain can have different prices depending on the store. Under the Fair Trade Act, there is no institutional problem because the final sale price can be set autonomously by the store owner, not the headquarters. However, consumers who are unaware of this are expressing confusion.

Various breads, including garlic bread, are displayed at a Paris Baguette store. Photo by Heo Midam

On July 5, a survey of bread prices at several Seoul branches of major franchise brands such as Paris Baguette (Paris Croissant) and Tous Les Jours (CJ Foodville) confirmed that even the same product can have different prices depending on the store. This tendency was especially pronounced in commercial districts with high foot traffic, where fixed costs such as rent are higher, resulting in relatively higher bread prices.

At Tous Les Jours, the price of red bean bread and soboro bread was 1,900 won each at the Mokdong Seunghee branch, 2,000 won at the Euljiro 3-ga Station branch, and 2,100 won at the Myeongdong Station branch. The price difference for cream bread was even greater. At the Mokdong Seunghee branch, it was 1,900 won, at the Euljiro 3-ga Station branch 2,300 won, and at the Myeongdong Station branch 2,500 won, resulting in a maximum difference of 600 won between stores. For baked cakes, the Jeju First Green Tea Castella was 15,000 won at the Mokdong Seunghee branch, 16,000 won at the Myeongdong Station branch, and 17,000 won at the Euljiro 3-ga Station branch.

It was found that the price of the same bread product varies depending on the store. Photo by Midam Heo

Even at stores of the same brand located just a few hundred meters apart, different prices may be applied to the same bread. The Paris Baguette Chungmuro Station branch and the Myeongdong Baek Hospital branch are about 500 meters apart in a straight line. However, the Myeongdong Baek Hospital branch sells 'Almond Financier' and 'Choco Financier' at 1,900 won each, while the Chungmuro Station branch sells them for 2,000 won. Products such as Myungga Chapssaltteok, Mr. Bear, and Miss Bear are also 100 won more expensive at the Chungmuro Station branch.

The reason why the price of bread from the same brand differs by store is that the authority to set the final sale price lies with the store owner. An industry official said, "We provide a suggested retail price as a guideline, but the actual price is determined by the owner, who considers various factors such as rent," adding, "If we were to enforce uniform pricing, it could actually be a violation of the Fair Trade Act."

According to Article 29 of the Fair Trade Act (Restriction on Resale Price Maintenance), it is in principle not permitted for franchise headquarters to force franchisees to set a certain sales price. This is a measure to prevent the headquarters from unilaterally controlling distribution prices or engaging in price collusion. In general, store owners determine the final sale price of bread by taking into account each store’s rent, labor costs, management fees, and the characteristics of the commercial district.

Consumers, who assumed that all product prices would be the same due to the franchise model in which raw materials and semi-processed products are supplied by the same manufacturer, are expressing surprise at the price differences. On an online community, people are sharing advice such as, "Not only bread, but all product categories like beverages and salads have different prices depending on the store," and "I go to stores that are as old and worn-out as possible because bread prices seem higher at newly renovated stores."

Song Naeun, a 30-year-old office worker, said, "I didn’t know prices would differ at the same franchise," adding, "In the end, depending on where you buy the same product, you could be at a disadvantage, so I think I’ll be more careful in the future." She also said, "Even a difference of a few hundred won makes a big difference for consumers, depending on whether they know about it or not."