Cafeteria operators log record profits as people seek affordable meals due to soaring prices

Cafeteria employees prepare bowls of mackerel stew for customers at the government complex in Sejong, Sept. 13. Yonhap

Cafeterias are booming in Korea. This is demonstrated most in office buildings, government offices, factories or schools with cafeterias that offer meals at lunch and dinner. Despite operating for a limited number of hours daily, people join long queues for a meal. Many don't mind the hectic mood as long as they can get a meal at an affordable price — typically for under 10,000 won ($7.60).

Behind the scenes, cafeteria service providers smile as business booms. Some of the local industry's major players have logged record sales in the third quarter. Some of them said their sales have returned to pre-COVID-19 levels.

The trend is due to food prices that have risen steeply this year nationwide. The Korean Statistical Information Service said prices for retail food products jumped more than 5.1 percent from January to last October year-on-year. Rising prices of fresh produce and basic food items are affecting the prices at restaurants and food vendors across the board. The average price for a meal when dining out has reached over 10,000 won, an unprecedentedly high level.

Hyundai Green Food, one of the country's leading food service providers, has recorded 574 billion won in sales in the third quarter, up seven percent year-on-year, and recorded profits of 28.3 billion won, up 20 percent from last year. Its cafeteria service, in particular, has seen sales jump by more than 20 percent this year, compared to last year.

The company also saw outstanding food supply sales for cafeterias as they experience growing popularity. It has bagged new supply deals worth 64 billion won in the third quarter alone.

CJ Freshway also saw an increase in sales thanks to its busy cafeteria service. The service department saw 197 billion won in its third quarter sales, up by over 21 percent year-on-year. The figure has contributed to the company's overall third quarter sales being recorded at 809 billion won, up 7.6 percent year-on-year.

The company said its sales to cafeterias benefitted from the service's recently expanded channels. In addition to having accrued new customers, its unmanned meal takeout service for employees called Snack Pick and smartphone app Fresh Meal, which accepts orders from its cafeteria service customers helped its operation.

Samsung Welstory logged third quarter sales of 726 billion won, up 3.3 percent year-on-year, and profits of 40 billion won, up 66 percent from last year. Our Home said its third quarter sales jumped at least 20 percent year-on-year.

"After COVID-19 settled down to the endemic level in the country, demand for cafeteria services soared and we signed many new service deals inside and outside the country," an official from Hyundai Green Food said. "The food ingredient supplying business, another key business of ours, has also drawn a large volume of new customers in the third quarter."