Kyochon heralds 30,000 won fried chicken era

The Korea Times

The Korea Times

Business

Mon, September 25, 2023 | 03:15

Companies

Kyochon heralds 30,000 won fried chicken era

Posted : 2023-03-25 09:05

Updated : 2023-03-26 13:33

Pedestrians walk past a Kyochon Chicken restaurant in Seoul, Friday. Newsis

By Park Jae-hyuk

Kyochon F&B decided to raise its fried chicken prices by up to 3,000 won ($2.30) from April 3, despite the government's request for restaurant chains to refrain from hiking prices further, in order to reduce the burden on low-income households.

Due to the decision, consumers will need to pay nearly 30,000 won, if they want to get fried chicken delivered from Kyochon.

According to the franchise operator of Kyochon Chicken, the price of Kyochon Original will rise to 19,000 won from 16,000 won, while the price of its signature menu, Honey Combo, will go up to 23,000 won from 20,000 won.

Considering the fact that consumers have to pay up to a 5,000 won charge for delivery service, Kyochon has taken a step closer to the range of a 30,000 won fried chicken meal.

When Chairman Yoon Hong-geun of Genesis BBQ, one of Kyochon's rivals, claimed last year that the price of fried chicken should be at least 30,000 won, he caused a severe backlash not only from consumers, but also from lawmakers who even tried to summon him to the National Assembly audit.

Kyochon explained that it had no choice but to raise its prices, in order to cope with the worsening profitability of its franchisees over the past few years. However, its latest price hike came just a year and five months after its previous price hike in November 2021.

"In addition to the rise of rents, labor costs and various commissions, the recent raw material price hike led us to be more desperate for improvements in the business environment of our franchisees," the company said in a press release.

The franchise operator added that it decided not to increase the prices of its Black Secret series, which was released last year. The premium chicken series currently costs up to 23,000 won, for the boneless option.

As Kyochon hikes its prices, complaints are growing among consumers about the possibility of other fried chicken franchises following suit.

Despite inflation, food-producing companies have remained cautious about raising their prices, as Agriculture Minister Chung Hwang-keun warned them against more price hikes. The government's pressure prompted CJ CheilJedang and other food firms to drop their plans to raise the prices of their products. Liquor producers also decided to freeze the prices of their alcoholic beverages.

Amid the growing concerns, Kyochon's competitors, such as Genesis BBQ and BHC, said they are not considering raising their chicken prices at this moment.

KFC's Korean operation, which will be sold by KG Group to a local private equity firm, Orchestra Private Equity, raised the prices of fried chicken and chicken-based menu items in February, in line with the trend of hamburger franchises carrying out price hikes.

pjh@koreatimes.co.kr