Lotteria's price hike draws customer complaints - Korea Times
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Lotteria's price hike draws customer complaints

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A staffer at a Lotteria restaurant in Seoul carries food ingredient deliveries into the store Oct. 28, 2020. Korea Times file
A staffer at a Lotteria restaurant in Seoul carries food ingredient deliveries into the store Oct. 28, 2020. Korea Times file

By Kim Jae-heun

Consumers are complaining about a recent price hike for of Lotteria's hamburgers, after the country's top chicken restaurant franchise Kyochon Food & Beverage (F&B) raised its menu prices last month.

"I cannot understand how a fast food burger item can cost over 9,000 won, when a pot of Korean sausage and rice soup costs 7,000 won," a consumer surnamed Kim said. "Kyochon chicken menu items cost nearly 20,000 or more now. It is ridiculous to see how they raise prices following the government's adoption of the Living with COVID-19 plan,"

Lotte GRS, the operator of Lotteria, said Wednesday it will increase prices for all of its menu items by 4.1 percent on average. This is the second price hike since February, when the hamburger franchise raised the prices of its 25 menu items by 1.5 percent on average.

The company said it had no choice because the minimum wage rose along with a surge in raw material prices due to the overseas logistics crisis that followed rises in retail and delivery platform fees.

"It was inevitable for us to raise the price of our burgers to improve earnings for our franchisees. We discussed the pricing matter with the franchise council before making the decision," a Lotte GRS official said.

Kyochon F&B also said it had to raise prices because of the burden of accumulating cost hikes and its need to improve the profitability of its franchisees.

However, this turned out to be an excuse. Kyochon F&B marked its largest operating profit last year and it is expected to break the record again this year. Lotte GRS does not reveal the business performance of its affiliates, so the validity of its comments is also unknown.

Consumers are also worried about the latecomers to the fast food franchise market raising their prices too, as only Lotteria and Kychon F&B have made announcements so far.

"Since both top hamburger and chicken franchise brands have raised their prices, other latecomers are expected to announce their price hikes soon. It is difficult to raise prices first due to the nature of the retail industry, but raising prices as latecomers is almost a natural step," an industry source said.

Here, BBQ Genesis and bhc denied having any short-term plan to raise their prices. McDonald's Korea and Burger King also said they have no plans for a price hike anytime soon.

Kim Jae-heun

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