Published : Aug. 24, 2022 - 14:43
People receive buckets of fried chicken at a deli counter on the basement floor of an E-mart in Eunpyeong-gu, northern Seoul, on Tuesday. (Choi Jae-hee / The Korea Herald)
Supermarkets in South Korea engaging in a price war on fried chicken is a welcome development for consumers like Shin Kyung-ja (not her real name) amid the soaring cost of living.
The 64-year-old was among the 40 or so people standing in line outside an E-mart in Eunpyeong-gu, northern Seoul, an hour before its opening on Monday.
They were waiting to buy a bucket of fried chicken offered at a special price of 5,980 won ($4.50). Twice a day at 10 a.m. and 2 p.m., the superstore has been selling a limited quantity of fried chicken -- between 40-50 buckets -- in a promotional event that started last week, an E-mart official said.
“It’s far cheaper than those sold at fried chicken franchises in my neighborhood,” Shin said. A typical bucket of fried chicken of a similar size offered at the big three franchise brands costs around 20,000 won.
People wait in line to buy cheap fried chicken at an E-mart in Eunpyeong-gu, northern Seoul, Monday. (Choi Jae-hee / The Korea Herald)
Shin’s queue ticket, which is needed to buy a bucket of fried chicken. (Choi Jae-hee / The Korea Herald)
It was not her first time doing an “open run” for discounted fried chicken, capitalizing on a chicken price war among major retailers.
Since late June, Homeplus has been offering its “Dang Dang Chicken” for 6,990 won per bucket. E-mart responded with an even cheaper 5,980 won chicken, while Lotte Mart jumped in with “Hantong Chicken” at 8,800 won.
Homeplus said it has sold over 460,000 buckets of fried chicken between June 30 and Aug. 21.
Expensive chicken
The customer craze is in stark contrast to 2010, when Lotte Mart began offering fried chicken for 5,000 won a bucket.
At that time, the retail giant took a drubbing, as it was widely viewed as a greedy corporate giant branching out into an industry of mom-and-pop stores and small franchise businesses.
Experts and industry insiders say the change of mood stems from growing consumer dissatisfaction over the rising prices of virtually everything -- including fried chicken, which has a unique position as a commoners’ delicacy here.
Major chicken franchises, led by the top three -- Kyochon, Genesis BBQ and BHC – have raised prices of their menu items in the first half of this year by 1,000 won to 2,000 won. Kyochon’s signature “Honey Combo” costs 20,000 won now, and so does BBQ’s most-popular “Golden Olive Chicken.”
According to a survey conducted by Seoul-based market research firm Macromill Embrain Trend Monitor on 1,000 adults between April 25-May 1, nearly 88 percent of the respondents said the current price of fried chicken is expensive.
Kim Soo-yong, a 31-year-old office worker living in Seoul’s Yeonnam-dong, said even with the quality and a variety of tastes offered by those chicken brands factored in, the current prices are burdensome.
“When I order one whole fried chicken on a delivery app, the food costs 20,000 or higher and with delivery fees added, I end up paying almost 25,000. I think both the food and delivery fees should be adjusted,” Kim said.
Some experts point out that 20,000 won appears to be a psychologically significant level for Koreans, largely due to the perception of fried chicken as a soul food for all – rich or poor.
“Koreans love fried chicken not just for its taste, but for its more affordable price compared to pork and beef,” pointed out Kim Tae-ki, an economics professor at Dankook University in Seoul.
Economically speaking, the price hike is understandable given growing inflationary pressure, the scholar said, but it would be wiser for chicken franchises and delivery apps to more actively seek ways to minimize the burden on customers, given how consumers think of fried chicken. He also pointed out that the companies enjoyed high sales during pandemic times, he said.
In 2021, the nation’s three major fried chicken franchises posted a combined revenue of 1.3 trillion won, up 15 percent from a year earlier.
What’s a fair price?
Supermarkets’ “inflation buster” chickens have also raised a rather profound question about what is a fair price for the crispy, double-fried chicken that many Koreans can’t live without -- especially given that the price of raw chicken meat hasn’t changed much over the past decade.
According to data from the Korea Broiler Council, the price of raw chicken meat was quoted at about 3,923 won per kilogram as of Monday, an increase of a mere 461 won from a decade earlier.
When asked how 6,990 won is even possible for a whole-chicken dish, Homeplus explained that it directly sources poultry, which significantly reduces costs. All chickens sold at its branches are cooked on the premises by existing store staff, it added.
The chicken price debate, however, is bitter for 48-year-old Kang Hyun-seob, who runs a fried chicken shop in Jongno-gu, central Seoul.
He claims that stores like his aren’t making much money, and raw chicken accounts for only a fraction of the costs of cooking the dish as well as maintaining the store.
The poultry meat itself may not have seen a big jump in prices, but all the other ingredients have.
As of Aug. 7, the price of flour rose 36.4 percent on-year, while that of cooking oil rose 55.6 percent, according to the data from Statistics Korea.
Store owners also suffer from rising costs of garnishes such as sauce or pickled radish, as well as packaging materials, monthly rents and labor costs, Kang stressed.
On top of all these, delivery platforms – which they have grown heavily reliant on over the past few years – are charging restaurant owners more, he added.
“For each transaction on delivery platforms, we usually have to pay some 2,000 won in commission alone,” he said.
Lim Young-tae, vice president of Jang’s Food, the operator of the fried chicken chain 60 Chickens, said chicken shops have a cost structure that can’t compete with massive discount stores.
“Since supermarket chains make use of their existing service areas as well as employees to sell fried chicken, they don’t have to worry about labor costs or monthly rents. Also noteworthy is that they don’t offer complimentary side dishes like pickles and a can of Coke,” he pointed out during a radio interview with broadcaster YTN on Thursday.
By Choi Jae-hee (
cjh@heraldcorp.com)