'Lunchflation’: South Korea grapples with rising dining costs

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'Lunchflation’: South Korea grapples with rising dining costs​

By Lina Jang January 23, 2025
insideretail.asia

South Korea continues to face mounting dining costs for the third consecutive year as high inflation, currency volatility, and rising interest rates drive food prices upward.

From popular dining options to workplace cafeterias and convenience store meals, prices have surged, intensifying the so-called ‘lunchflation’ phenomenon.

According to data from Statistics Korea released on January 13, 2025, the dining-out Consumer Price Index (CPI) climbed 3.1 per cent in 2024 to 121.01, outpacing the overall CPI increase of 2.3 per cent.

Though this growth rate has slowed from the 6.0 per cent recorded in 2023, it marks the third straight year of dining costs rising above 3 per cent and continues a 12-year trend of outpacing the general inflation rate.

Among menu items, lunchbox prices led the increase with a 5.9 per cent rise, followed by tteokbokki (5.8 per cent), hamburgers (5.4 per cent), and gimbap (5.3 per cent). Staple comfort foods like kalguksu and fried chicken each rose by 4.8 per cent, while naengmyeon and pho climbed 4.2 per cent and 4.1 per cent, respectively, reflecting steeper price hikes for budget-friendly meals.

Workplace cafeterias saw the sharpest price jump, surging 6.9 per cent in 2024—the highest increase since records began in 2001. This marks the fourth consecutive year of price hikes exceeding 4 per cent, straining workers seeking affordable lunch options.

Convenience store meals, once considered cost-effective, have also become more expensive. Convenience store lunchboxes, first tracked in consumer price statistics in 2019, saw a 4.9 per cent increase in 2024 following a 5.2 per cent rise in 2023. Similarly, triangular gimbap prices rose 3.7 per cent in 2024, continuing a steady upward trend.

Analysts link this persistent lunchflation to rising agricultural and food costs driven by climate change and a weakening won. In 2024, agricultural, livestock, and fisheries products saw a 5.9 per cent price surge—double the overall CPI increase.

Notably, fruit prices soared 16.9 per cent, while vegetable and grain prices rose 8.1 per cent and 3.3 per cent, respectively. Livestock products remained relatively stable with a modest 0.7 per cent increase.

Looking ahead, experts warn that lunchflation will likely persist in 2025. Global economic uncertainties, including geopolitical instability and a sharp rise in the won-dollar exchange rate, are expected to drive up the costs of imported ingredients.

Jeong Ji-yeon, Secretary General of the Korea Consumer Federation, stated, “The factors influencing food prices, such as climate change and exchange rates, are becoming increasingly complex. This trend suggests that food prices will continue to rise this year.”

In response to rising consumer sensitivity to food prices, South Korea’s retail industry is intensifying competition in the value-for-money meal sector.

E-Land’s Kim’s Club has gained popularity with its ‘Deli by Ashley’ line—a budget-friendly home meal replacement (HMR) version of its Ashley Queens buffet, priced at US$2.78. Since its launch in April 2024, over 200 products have sold more than three million units.

Major retailers are also responding. Emart and Lotte Mart have expanded their affordable HMR offerings with the ‘Amazing Deli’ and ‘Yorihada’ brands. Convenience stores are joining the competition as well.

Emart24 introduced ultra-low-cost gimbap for $1.32—45 per cent cheaper than average—and a bibimbap meal for $2.51, aiming to capture the budget-friendly food market.

As dining costs continue to climb, South Korean consumers and businesses alike are navigating an increasingly challenging food landscape in 2025

This story was originally published via Korea Bizwire.