Major Korean bakery chains are lowering bread prices following government-led reductions in flour and sugar costs, while hamburger franchises continue raising prices, citing rising meat and labor expenses.
CJ CheilJedang, Samyang Corporation and other major flour and sugar producers cut flour prices by approximately 5% last month, prompting bakeries to follow suit.
Paris Baguette announced it will reduce bread prices by up to 1,000 won and cake prices by up to 10,000 won starting January 13. The company also plans to launch a new value croissant priced in the 1,000-won range. Tous Les Jours, operated by CJ Foodville, will lower prices on 17 bread and cake items by 100 to 1,100 won.
"Despite ongoing cost pressures, we decided to cut prices to ease the burden on consumers and support price stabilization efforts," a Paris Baguette spokesperson said.
Mass-produced bread sold at convenience stores and supermarkets is also under review for potential price reductions, according to industry sources.
Burger franchises, however, are moving in the opposite direction. McDonald's raised prices on 35 menu items by 100 to 400 won on December 20. Mom's Touch increased prices on 43 items by 300 to 1,000 won, or 2.8% on average, starting January 1. Burger King has also implemented price increases.
"We raised prices due to increased costs for ingredients such as patties and vegetables, as well as logistics expenses," the companies explained.
Lotte GRS, which operates Lotteria, signed an agreement with the Fair Trade Commission requiring one-week advance notice before price increases. Industry observers interpret this as a signal the company will refrain from near-term price hikes.
The divergent pricing strategies reflect fundamental differences in cost structures.
Flour accounts for 20% to 30% of total costs for bakery products such as white bread and red bean buns, making flour price changes directly impact retail prices.
For hamburgers, buns represent less than 10% of total costs. Meat patties, chicken, vegetables and cheese comprise the majority of expenses, limiting the impact of flour price reductions.
Key hamburger ingredients continue to rise in price. The import beef price index reached 169.91 in January, up 15.9% year-over-year, according to Statistics Korea. This reflects global "beefflation" concerns driven by declining cattle inventory in the United States, the world's largest beef producer. The egg price index also climbed more than 6% to 142.34.
Fast-food restaurants face additional cost pressures from labor and logistics due to their made-to-order cooking model.
"When prices for various raw materials are all rising simultaneously, it's difficult to lower product prices just because one ingredient has become cheaper," an industry official said. "We are closely monitoring the situation, especially with the government's price management policy and the Iran situation adding uncertainty."