Lunch is Too Expensive — And That’s the Least of South Korea’s Problems

Busan, South Korea — A single roll of gimbap now costs more than 3,000 won at many neighborhood snack bars. A basic bowl of kalguksu? Often over 8,000. For office worker Jeong, 38, lunch in downtown Busan used to be a welcome mid-day relief. “Even just two years ago, I could grab lunch for under 7,000 won,” he says. “Now, even 10,000 isn’t enough.”

It’s a sentiment echoed across the city — and the country. Amid rising food costs, stagnant wages, and shrinking consumer confidence, the lunch table has become one of the most visceral battlegrounds of South Korea’s economic strain.

Recent data from Statistics Korea shows that in 2023, Busan’s average food-away-from-home price rose by 3.7%, outpacing the city’s overall inflation rate of 2.5%. Across the country, items like gimbap (+5.3%) and boxed lunches (+5.9%) led the surge. Yet, the public perception is that the real price hike is far steeper — not just in money, but in quality and value.

What’s alarming economists and local officials alike is that this is not merely a story of temporary inflation. The consistent outpacing of food prices over general consumer prices for more than a decade signals something deeper. South Korea’s real purchasing power is eroding, and that erosion is most visible where it hurts the most — in daily life.

From shuttered small eateries and rising rent burdens to the dominance of delivery platforms and franchise consolidation, what began as a lunch problem has grown into a larger warning: South Korea’s domestic economic ecosystem is fraying — and cities like Busan are on the front lines.

Price Shock: Where Inflation Hits the Hardest — The Lunchbox

Lunch isn’t just a meal — in South Korea, it’s a daily ritual, a cultural norm, and increasingly, a source of financial anxiety.

According to Statistics Korea, nationwide restaurant prices rose by 6.0% in 2023, outpacing both overall consumer inflation (3.6%) and wage growth. In Busan, the trend is equally stark. The city’s food-away-from-home price index rose 3.7%, while the total consumer price index increased just 2.5%. That differential reflects a growing reality: the prices of essentials — not luxuries — are out of reach for ordinary people.

Take gimbap. Once the quintessential budget-friendly snack, it now averages over 3,100 KRW per roll in Busan, up 5.3% from the previous year. Other staples tell a similar story: kalguksu (+9.0%), boxed lunches (+5.9%), hamburgers (+5.4%), hangover soup (+5.1%). Even subsidized workplace cafeterias increased prices by 6.0% in 2023. The rise isn’t just numeric — it's psychological. Consumers feel they’re paying more for less, with no corresponding increase in quality or portion.

This price behavior mirrors a deeper economic issue: the erosion of real purchasing power. Though average nominal wages have increased, real wages (adjusted for inflation) fell by 1.1% in 2023, marking the second consecutive year of decline. In simpler terms, people are earning more but can afford less.

These shifts are particularly pronounced in Busan, where real estate pressures and a shrinking working-age population amplify economic stress. Workers now skip lunch more often, choose convenience store meals, or reduce portion sizes — not by preference, but by necessity.

In policy terms, food prices function as a leading indicator. They're often the first place where monetary weakness or fiscal failure becomes personal. In South Korea, the persistence of lunch inflation, even as headline inflation moderates, is a sign that underlying structural weaknesses remain unaddressed.

A cracked lunch economy, then, is not just a culinary concern — it’s a societal fault line, exposing how fragile the middle-class lifestyle has become.

The Franchise Trap – Homogenization and Mass Failure

In Busan's once-bustling Seomyeon district, rows of independently-run noodle shops and fishcake stalls have vanished, replaced by near-identical storefronts bearing franchise logos. To many consumers, this change signals modern convenience. To local economists and small business owners, it signals collapse.

South Korea’s food service sector has undergone rapid franchise saturation. Popular dishes — tteokbokki, fried chicken, gimbap — are swiftly standardized, scaled, and replicated across the country. Busan, once known for its regional flavors and culinary individuality, is losing its food identity to the efficiencies of franchising.

But there's a darker side to this trend. Franchise expansion has coincided with — and, some argue, caused — a spike in small business failure rates. Drawn by the promise of a tested brand and presumed market demand, thousands of aspiring entrepreneurs pour life savings into franchise outlets. Yet the 3-year survival rate for small food-related businesses is below 30%, according to the Korea SMEs and Startups Agency.

Here's the trap: franchisors profit from onboarding new stores, while individual franchisees often operate on razor-thin margins. Royalty fees, bulk purchasing contracts, and marketing levies eat away at revenue. Worse, market oversaturation means many franchisees open in already-crowded districts, accelerating cannibalization.

In Busan, this dynamic is visible in stark numbers. A 2023 municipal report noted that new franchise outlets in the city have outpaced local independent restaurant openings by a factor of 3:1, even as foot traffic in key commercial zones declines. What remains is a landscape of homogeneous menus, fleeting business lifespans, and empty storefronts.

Even local "successful" restaurants fall into the trap. Once they become viral, investors push for rapid franchising — which often dilutes quality, shifts focus from community to scale, and leads to quick saturation. The result? Once-celebrated eateries are reduced to faded signboards and unpaid loans.

Franchising isn't inherently bad. But in Korea's current economic context, it’s become a vehicle for risk displacement, moving failure away from big capital and onto the shoulders of individual owners.

The Rent Paradox – Succeed, and You’re Evicted

In theory, a thriving restaurant should be a landlord’s dream. In practice, it’s often the first sign that rent is about to spike.

Busan’s small business owners are increasingly caught in a cruel paradox: the more successful their business becomes, the less likely they are to survive. This isn’t due to poor management or waning demand, but rather to South Korea’s deeply entrenched speculative real estate system, where profitability often invites eviction.

Across Busan, commercial landlords continue to raise rents despite rising vacancy rates, hoping to attract “premium tenants” who rarely materialize. As a result, Busan’s mid-to-large commercial property vacancy rate hit 14.2% in early 2024, surpassing the national average of 13.0%. Smaller neighborhood stores are faring no better, with a 7.4% vacancy rate and rising.

One of the hardest-hit areas is the Pusan National University commercial district, once a hotspot for student spending and nightlife. Its vacancy rate reached a staggering 27.2% in 2023, making it one of the most hollowed-out university zones in the country.

The root of this dysfunction is the inversion of incentives. In many cases, property owners profit more from rent escalation and asset appreciation than from long-term tenant stability. South Korea’s “building owner capitalism” thrives on short leases, frequent turnover, and upward-only rent revisions — practices that make the self-employment sector perilously unstable.

Even when rents decline slightly — as seen in select Busan zones where lease prices dropped by 0.3–0.6% in late 2023 — the absolute cost remains among the highest in the country. In districts like Haeundae or Seomyeon, high fixed costs mean small businesses start at a loss, not a profit.

This rent-driven displacement undermines more than just individual livelihoods. It frays the cultural and economic fabric of neighborhoods, erases community institutions, and deters the next generation of local entrepreneurs.

In a rational system, strong business performance would be rewarded with stability. In South Korea’s rent economy, success simply invites the next eviction notice.

The Unseen Cost of Convenience – How Delivery Apps Eat Into Small Business Profits

Once hailed as saviors during the pandemic, South Korea’s delivery platforms are now increasingly seen as middlemen that extract more value than they create — particularly for small restaurants in cities like Busan.

With Baemin, Yogiyo, and Coupang Eats controlling over 80% of the market, the delivery ecosystem offers visibility and volume — but at a price few can afford long-term. A closer look at the economics reveals a grim picture for small business owners:

• Commission fees now reach up to 9.8% per order on some platforms.
• Advertising costs, often needed for visibility in app listings, can consume 10–20% of revenue.
• Delivery charges, while often paid by customers, are frequently subsidized by restaurants through app promotions or free-shipping incentives.
• For some operators, these combined expenses mean over 40% of each order’s value is lost to the platform.

Busan-based restaurant owner Kim, who runs a small pasta kitchen near Centum City, says he used to earn a net margin of 20–25% before going online. “Now,” he says, “on high-volume days, we’re lucky if we break 5% profit. On low days, we lose money for every order.”

In some cases, delivery app reliance becomes a vicious cycle. As foot traffic to stores declines — due to changing habits and rising rents — restaurants become more dependent on online orders. But more orders don’t necessarily translate into more income. The result is a paradox of growth without gain.

Adding insult to injury, recent moves by platforms to apply commission fees to takeout and pickup orders — where the app’s logistical role is minimal — have triggered backlash. Critics argue that delivery apps are not just facilitating transactions but monetizing access to customers who were once reachable for free.

The broader consequence? Menu simplification, quality reduction, and rising consumer prices. Only dishes that are delivery-friendly — low-cost, high-margin, quick to prepare — tend to survive. Labor-intensive or time-sensitive dishes, once hallmarks of Busan’s local food scene, are disappearing from the ecosystem entirely.

Some local governments have experimented with public alternatives. Gyeonggi Province launched its own public delivery platform, while Busan has discussed cooperative delivery models. But such efforts remain limited in scale and face significant logistical hurdles.

Until then, many restaurant owners describe their relationship with delivery apps as one of dependence without dignity. As Kim puts it, “We’re not running a restaurant anymore. We’re running a logistics node.”

The Bigger Picture – Consumer Confidence Falls, Regional Economies Vanish

Lunch may be where the crisis begins, but its ripple effects are now visible across the broader economy — particularly in South Korea’s regions, where the economic slowdown hits first and hardest.

Busan is case in point. In 2024, for the first time since statistics were recorded, the proportion of self-employed workers in the city fell below 20%, down to 18.6% — a record low. Just two years earlier, the figure was over 21%. The decline is not merely a demographic trend; it's driven by an accelerating pace of business closures, shrinking consumer bases, and thinning profit margins.

In 2023 alone, Busan saw over 60,000 business closures — the highest annual figure ever recorded in the city. Over 53% of them cited “business deterioration” as the reason, a significantly higher rate than the national average. The problem isn't just that businesses are failing; it's that fewer are taking their place.

According to a 2024 report from the Busan Research Institute, the city’s net self-employed population shrank by 11.3% in one year, a stunning collapse that left more than 40,000 people exiting the sector. In comparison, the national decline was just 0.2%. No other region came close.

At the same time, consumer spending is in retreat. Between 2022 and 2024, South Korea experienced an unprecedented event: a three-year simultaneous decline in both household food purchases and food-away-from-home spending. Historically, when one category dipped, the other would rise. Now both are falling — a clear sign of economic fatigue.

Busan’s once-busy shopping streets — like Nampo-dong, Gwangbok-ro, and Seomyeon — have seen a visible decline in pedestrian traffic. Many storefronts remain empty for months. University neighborhoods, particularly near Pusan National University, report commercial vacancy rates exceeding 25%. Local business owners now refer to them as “zombie zones.”

Underneath these local struggles lies a macroeconomic chill: Korea’s Consumer Sentiment Index stood at just 88.2 in late 2023, well below the neutral level of 100. In real terms, this translates into lower spending, cautious households, and an economy that is increasingly dependent on exports rather than domestic vitality.

The cost is more than financial. In cities like Busan, the erosion of local business doesn't just reduce GDP. It hollows out communities, weakens social cohesion, and diminishes young people’s belief that success is possible without leaving for Seoul or abroad.

In short, the tables are empty — not just in restaurants, but across entire districts.

A Society That Loses Its Table Cannot Endure

The average price of lunch may seem like a trivial metric. But in South Korea today, it functions as a macroeconomic signal — a flashing red warning light.

From Busan’s hollowed-out university districts to nationwide declines in small business viability, the data tells a consistent story: the country is not just enduring inflation — it is undergoing a structural unraveling of its domestic economy.

This unraveling begins at the table. When working families can no longer afford a simple lunch, when restaurant owners work 12-hour days but earn less than before, when young entrepreneurs give up after a year because rent and delivery fees consume their margins — something deeper is broken.

This is not simply a cost-of-living crisis. It represents the converging impact of multiple, long-neglected structural issues: the persistent stagnation of real wages that has eroded household purchasing power; a commercial real estate model designed to extract profits rather than sustain tenants; a platform-based economy that shifts costs onto small businesses while concentrating profits at the top; and a chronic lack of policy innovation to nurture and protect local consumption ecosystems.

What’s happening in Busan is not unique — it’s just happening first, and more visibly. Regional cities often absorb economic shocks earlier than capitals. Their struggles show us where the cracks are — and where Seoul, Daegu, Gwangju, and even the national economy may be headed.

If the lunch table is the most human scale of the economy, then its collapse is a warning: no society can be sustained without affordable meals, viable businesses, and vibrant streets.