Lunchflation puts the squeeze on Seoul restauranteurs as margins collapse, customers flee

Just a few years ago, 10,000 won ($6.5) for a bowl of gukbap — a bowl of warm soup enjoyed with steamed rice — was considered highway robbery.

In 2026, it's the new normal. Maybe even on the cheap side.

However, this has brought little relief to restaurant owners, who now find themselves trapped in a no-win equation amid ever-worsening inflation: charge more and risk losing customers, or charge less and risk going out of business.

Cheon Jeong-rye, the owner of Songok, a buckwheat noodle restaurant Songok in Bukchang-dong in central Seoul, is bracing for another difficult summer. The restaurant opened in 1965, with Cheon's family running it for two generations.

This summer, however, is proving to be a particularly difficult one among the 65 years of history. The restaurant's signature dish, chilled buckwheat noodles, now costs 11,000 won, up 4,000 won from 7,000 won in 2016. Even its cheapest item, yubu (fried tofu) udon, has risen from 5,500 won to 9,500 won. In less than a decade, prices of both menu items have risen by 4,000 won.

"There isn't a single thing that hasn't become more expensive, whether it's ingredients or labor, so we raised prices once more after Chuseok [Korean autumn harvest holiday] last year," Cheon said. "Regular customers who used to order three servings of noodles now order only two, and that's something I am concerned about."

Cheon no longer employs a dining-room server during the busy lunch rush.

"If I hire someone, there's nothing left over," Cheon said. "I do everything myself now. We need to earn as much as possible during the summer to survive the winter, but these days there are even fewer customers than during the Covid-19 pandemic.”

Soaring lunch prices are squeezing both office workers and small-business owners.

On May 29, the JoongAng Ilbo revisited major restaurants in Bukchang-dong, a popular dining district in Seoul's Jung District. The on-site visit came two and three years after the previous surveys in 2023 and 2024.

Of the 28 restaurants surveyed in 2023, only 15 remain in business. The 13 have gone out of business in the past three years. More than half of those remaining establishments — eight out of 15, or 53.3 percent — have raised the prices of their cheapest lunch menu items over the past year and a half.

When the newspaper first conducted its survey in February 2023, 67.9 percent of restaurants surveyed — 19 out of 28 — offered at least one lunch menu item priced below 10,000 won. This year, that share has fallen to 46.7 percent, or seven out of 15 restaurants.

One gukbap restaurant raised the price of its cheapest bowl from 9,000 won in 2023 to 10,000 won in 2024. The dish’s price went up to 11,000 won this year.

Even gukbap, once a go-to budget meal, is no longer as affordable as it used to be.

As dining out becomes increasingly burdensome, office workers are turning to corporate cafeterias and convenience stores.

“Although there are plenty of famous restaurants nearby, even their cheapest menu items are usually over 10,000 won,” said Choi, an office worker who was dining at a company cafeteria in the Bukchang-dong food alley. “Once you add a side dish and coffee, the bill comes close to 20,000 won, which is financially burdensome."

"Even gimbap [rice roll] costs more than 5,000 won a roll if it has beef [toppings inside]," Choi added. "I'd rather eat at the cafeteria, where I can get rice, soup and several side dishes for 8,900 won."

“I spent nearly 20,000 won for lunch with a 15,000-won meal and a 4,000-won coffee,” said Lee, an office worker in the Seocho-dong neighborhood in southern Seoul. "When I'm eating alone, I usually get by on cup noodles and a triangle gimbap from a convenience store for around 8,000 won, and I look for the cheapest coffee I can find." Triangle gimbap is a Korean version of Japanese onigiri, also known as a rice ball.

Government data show widespread hikes in the price of eating out.

Prices of eight typical restaurant menu items rose between 3 percent and 5 percent year-over-year in Seoul as of April this year, according to the Korea Consumer Agency’s information portal.

A roll of gimbap costs an average of 3,800 won, up 4.9 percent from a year earlier. Kalguksu, a noodle dish once synonymous with an inexpensive lunch, rose 4.4 percent to 10,038 won on average.

In Korea, lunch prices higher than 10,000 won are perceived as significantly more burdensome.

Menu items that had already crossed that threshold also became more expensive. Samgyetang, or chicken-ginseng soup, averaged 18,154 won, up 3.7 percent, while naengmyeon, or cold noodles, rose 4.1 percent to 12,615 won.

Even hamburgers, one of the few remaining lunch options priced around 5,000 won, were found to have become more expensive. Lotteria, a burger chain operated by Lotte Group's affiliate Lotte GRS, raised prices on 22 à la carte burger items by an average of 2.9 percent beginning May 28. Its signature Ria's Bulgogi Burger now costs 5,100 won, up 100 won. McDonald's Korea and Burger King also raised prices on their flagship products in February. The Big Mac from McDonald’s increased from 5,500 won to 5,700 won, while the Whopper from Burger King rose from 7,200 won to 7,400 won.

The companies attributed the price hikes to higher food, labor and logistics costs, as well as continued volatility in global markets.

Dining-out prices may climb further.

The prices of eggs, a key ingredient in many restaurant dishes, have been rising sharply. The average retail price of a 30-pack of large eggs rose 12.9 percent in just three months, from 6,561 won in February to 7,404 won last month, according to the state-run Korea Institute for Animal Products Quality Evaluation.

The increase was driven in part by supply shortages after 11.34 million laying hens were culled following outbreaks of highly pathogenic avian influenza last winter.

“It’s not just eggs,” a gimbap restaurant owner said. “Rice, burdock root, carrots and even plastic bags have all become more expensive. There's so little profit left that it feels like we're working for free.”

The problem is that restaurants cannot fully pass rising costs on to consumers, because if they raise prices enough to cover higher expenses, customers may stop coming. If they keep prices unchanged, profits shrink.

That dilemma helps explain why only 15 of the 28 Bukchang-dong restaurants surveyed by the paper three years ago remain in business today.

Another potential risk is higher oil prices stemming from the Iran war.

Restaurant-service prices in the last month rose 2.6 percent from a year earlier, below the overall consumer inflation rate of 3.1 percent, according to the Ministry of Data and Statistics. Unlike other consumer prices, restaurant prices often rise with a lag because businesses gradually absorb increases in ingredients, utility and labor costs before passing them on to customers.

Further increases in restaurant prices appear inevitable in a situation where surging oil prices combine with higher import costs for agricultural, livestock and fisheries products driven by a weak won, experts say. Since the outbreak of the Iran war, petroleum product prices jumped 24.2 percent in May this year compared to the same month last year.

"We need to monitor how much of the increase in global oil prices will eventually be passed through to processed foods and restaurant prices," said Lee Doo-won, a senior official at the Data Ministry.

"Over the past five years, restaurant prices have closely tracked increases in food and agricultural commodity prices," said Choi Chul, a professor of consumer economics at Sookmyung Women's University. " Given rising labor and rent costs, it's difficult to argue that restaurants have raised prices too aggressively. Still, many consumers feel prices have risen sharply because what they consider a reasonable lunch price no longer matches reality.”

"As dining out becomes more expensive, many people can simply opt to eat at home instead," Prof. Choi said. "That poses a risk not only to consumer spending in the overall economy but also to the profitability of small business owners."

BY NAM SOO-HYOUN, JANG WON-SEOK [[email protected]]

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.