‘Delivery’ coffee and tteokbokki restaurant “sales plummet”… owners ‘sigh’

“We used to get an average of 70-80 orders a day when we were distancing ourselves from COVID-19, but now we only get 40-50. It’s a vicious circle where we have to raise food prices and delivery fees, and our sales go down.”

Park Mo, 46, who has been running a delivery tteokbokki restaurant in Seongbuk-gu, Seoul, for four years, sighed at the decline in delivery demand and high prices during the pandemic. “The cost of ingredients such as cooking oil, sauce, and rice cakes, which used to cost around 300,000 won in six months, is now in the 500,000 won range,” Park said. “When I raised the price of the basic menu from 20,000 won to 26,000 won, the number of orders decreased and sales dropped by 30 to 40 percent.”

Garbage lies near a closed takeout restaurant in Gosi-chon, Daehak-dong, Gwanak-gu, Seoul, on the 1st (Photo by Kim Young-eun)
The so-called “Gosi-chon” shopping district in Daehak-dong, Gwanak-gu, Seoul, which I visited around lunchtime on the 1st of this month, also had many delivery restaurants that had locked their doors. One out of every two commercial buildings was either closed or not in business. Some of the shuttered shops had promotional stickers such as “order delivery and takeout” alongside “for rent” signs.

“The cost of ingredients has increased by 10 to 20먹튀검증 per cent this year,” said Lee, whose aunt in her 30s has been running a coffee delivery business in the neighbourhood for two years. “We have discontinued some of our menus because changing ingredients changes the taste, and the owner next door got rid of sandwiches with a short shelf life.” “As the cost of raw materials has also increased, we have to compete with lower-priced coffee shops around us,” Lee said, adding that five delivery shops have disappeared in the area since the beginning of this year.

The delivery market, which grew rapidly during the COVID-19 pandemic, has noticeably shrunk since social distancing was lifted in April last year. According to Statistics Korea’s “Online Shopping Trends” data, the transaction value of “food delivery services” in February was 2.18 trillion won, down about 11.5 per cent from the same period a year earlier (2.2814 trillion won). According to the “2023 Delivery Service Trend Report” released in April by trend analyst OpenSurvey, which surveyed people aged 20 to 59 nationwide, the proportion of people eating out via delivery instead of in-store or takeout was 30.1 percent, the lowest since 2020.

In fact, consumers are using food delivery services less. Reasons for this include increased outdoor activity during the de facto pandemic and the burden of delivery costs. “I used to order delivery seven times a month, but now it’s three or four times a month,” said Park Na-hyun, 25, an office worker in Geumcheon-gu, Seoul. “If I order sushi that costs 17,000 won, I have to pay 6,000 won for delivery, which makes me give up.”

Gosi-chon, Daehak-dong, Gwanak-gu, Seoul, on the 1st. A ‘rental inquiry’ sign is posted in the window of a closed delivery restaurant.(Photo by Kim Young-eun, Trainee Reporter)
Delivery agencies and delivery specialty stores are in a “catch-22” situation as the demand for delivery food decreases amid the pandemic. They are faced with the challenge of raising delivery fees due to high prices and preventing further customer churn.

“In Ansan, a large delivery platform raised the delivery fee for riders to 10,000 won per order, forcing other companies to raise their delivery fees in a gut-wrenching manner,” said Nam Gung-jin-sung, chairman of the Ansan branch of the Gyeonggi Delivery Riders Association. “Overall, customers turned away because of the high delivery fees.” “Large companies incentivise riders to get riders, attract customers with various coupons, and support merchants with commissions,” he said, adding, “It is difficult for small and medium-sized delivery agencies that cannot do the same to survive.” “I don’t think the cost of living and delivery fees will drop easily,” said a male aunt in her 40s who runs a cafe specialising in delivery in Gwanak-gu. “I don’t know how to maintain sales when the number of customers will continue to decrease.”

The industry is looking for support. To prevent the market from becoming a “monopoly” of a few large platforms, the government should provide delivery tips to small and medium-sized businesses that use delivery agencies.

However, experts are divided. “During COVID-19, there was a social consensus to support those whose businesses were restricted, but now there may be equity concerns about ‘why only the delivery industry is helped,'” said Joo Won, head of the Economic Research Division at the Hyundai Research Institute. “The government should not turn a blind eye to self-employed people who have turned to delivery to avoid distancing and business restrictions,” said Jeong Se-eun, a professor of economics at Chungnam National University. “It should seek remedies such as systematic consulting for industry transformation.”

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