High fuel price relief payments have begun rolling out, and expectations are rising across South Korea’s dining industry. Because the payments can be used only at neighborhood businesses and small-merchant franchise outlets, the industry expects spending to flow to everyday dining such as fried chicken and snack foods.
According to the industry on the 27th, dining franchises allow the relief payments to be used at franchisee-run stores, but not at company-owned outlets.
Franchise operators have moved quickly, posting signs at entrances saying the payments are accepted. Headquarters are also supporting stores by distributing promotional materials, aiming to capture customers as the funds enter the market.
The optimism reflects last year’s experience with government-issued consumer coupons. The Ministry of the Interior and Safety said that during last year’s livelihood recovery coupon program, restaurants accounted for 40.3% of total spending, or 3.6419 trillion won, making dining out a leading beneficiary.
Major brands also reported measurable gains. Kyochon Chicken posted operating profit of 11.3 billion won in the third quarter of last year, up 47.2% from a year earlier, during the period when coupons were issued. BBQ and bhc said weekly sales rose by 18% and more than 25%, respectively, right after the payouts.
Industry officials expect a similar pattern this time, noting that time-limited payments tend to be spent quickly on services such as dining out and delivery.
“When payments are issued, the pattern has been that people first spend them on dining they can buy immediately near home,” one industry official said. “This time, too, we expect a noticeable improvement in sales, especially at franchise outlets.”
The timing is also seen as favorable, with the spring and summer peak season for outdoor activity approaching and the professional baseball season underway, which could lift delivery and takeout demand, particularly for chicken, the industry said.
Still, some analysts cautioned against overly rosy expectations. The payments are expected to be about 100,000 to 150,000 won per person for most people, excluding basic livelihood recipients and near-poverty households — about 40% of last year’s minimum consumer coupon amount of 250,000 won — raising doubts that the boost will match last year’s. With ingredient costs rising over the past year and labor costs still high, some also say the net benefit to franchise owners may be limited.
“A temporary rebound is possible from the policy effect, but in a high-inflation environment, it remains to be seen whether it will lead to a real recovery in consumption,” another industry official said.
* This article has been translated by AI.
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