South Korean office workers hit convenience stores as ‘lunch-flation’ bites

The Bank of Korea estimates each 1 per cent price rise in imported agricultural products will push up processed food prices by 0.36 per cent in the next year and restaurant prices by 0.14 per cent in next three years.

Some operators say that diners should expect bigger price hikes.

"As a matter of fact, I need to raise the price even higher," said Lee Sang-jae, who runs a galbitang restaurant in Seoul's central district and has already raised prices twice this year, to 12,000 won from 10,000 won.

"Instead, I am giving up some of my profit margin, as I also have to consider office workers' light wallets these days."

In a survey by human resources firm Incruit last month, 96 per cent of 1,004 office workers said that they now found lunch prices burdensome. Among those, almost half were looking for ways to cut lunch spending.

But in South Korea, lunchtime has been regarded sacred among office workers, who often mingle with friends and colleagues for longer than the allotted hour at busy diners.

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"It is much cheaper than going to a restaurant, but the downside is we cannot have lunch all together here," said Ku Dong-hyun, 28, chomping on gimbap and ramen noodles from a GS25 for his Friday lunch.

While many small restaurants are still benefiting from a bounce-back in evening dining after months of COVID-19 social distancing rules, economists warn that prolonged pressure on consumer prices will weigh on consumption.

"Real purchasing power is shrinking amid fierce inflation pressures, but people don't want to cut down evening gatherings they just started, while on lunches they can," said Lee Seung-hoon, chief economist at Meritz Securities.

"As high-marching consumer prices last longer and longer, it will start to weigh on private consumption, and when it does, together with worsening external conditions for exports, it will raise questions about the central bank's aggressive monetary tightening that we are seeing now."

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