Last year, the performance of the gimbap franchise was reported to be poor. The rise in materials and supplies costs and the increase in labor costs were reasons for the hike in gimbap prices. It was also pointed out that consumers are choosing convenience stores over gimbap franchises, as convenience store gimbap is relatively cheaper.
According to the business report of the gimbap franchise Gimgane on the 11th, last year's revenue was 37.5 billion won, a decrease of 4.6% compared to the previous year. Operating profit turned to a loss, with an operating loss of 265 million won. The net loss for the period was recorded at 347 million won.
The situation for Gimgane, which had issues involving the founder's sexual misconduct, is not unique. KBM, which operates Go Bong Min Gimbap, saw its revenue drop by 10.3% compared to the previous year, totaling 31.1 billion won. Operating loss was 400 million won. Although Baruda Kimseonsaeng managed to record an operating profit of 1.7 billion won due to reduced selling and administrative expenses, its revenue dropped 18% compared to the previous year, totaling 16.8 billion won. Yum Saem Gimbap was one of the few to see an increase in revenue, recording 19.6 billion won, a 6.5% rise compared to the previous year. However, its operating profit was only 98 million won.
One reason why revenue from gimbap franchise headquarters is not thriving is that the number of franchise stores is decreasing. The franchise headquarters receives a fee from franchisees for sharing the brand and passing on expertise, so the closure of stores inevitably reduces revenue. According to the Statistics Korea, the number of gimbap shops decreased to 46,211 in 2023 from 48,898 in 2021, a decrease of about 5%.
There are other reasons as well. The price of seaweed, a key ingredient in gimbap, has soared excessively. According to the Korea Maritime Institute's seafood industry monitoring center, the wholesale price for 'gimbap-grade seaweed' reached 10,000 won for a pack (100 sheets) last October. This is an increase of about 80% compared to a year ago. The wholesale price of seaweed exceeded 10,000 won for the first time since relevant statistics began being compiled in 2004.
A franchise representative noted, "Seaweed was suddenly dubbed 'the black semiconductor,' and as it began to gain attention for export, the cost surged rapidly," adding, "If this rapid price increase continues, we will have no choice but to raise gimbap prices, as seaweed is a key raw material."
The prices of ingredients needed to create tightly packed gimbap are similarly affected. The effects of abnormal weather are significant. Last year's consumer price index for carrots soared by more than 70%, rising from 94.70 in the first quarter to 161.40 in the fourth quarter. A private brand manager at a large supermarket stated, "The main carrot-growing region is Jeju, but due to extreme weather and heat waves, the crop yield has been poor."
The increase in the minimum wage is also a factor complicating the operation of gimbap franchises. From the perspective of franchise operators, it has become challenging to find workers for rolling gimbap as in the past. The increase in the minimum wage has caused a mismatch in profit margins.
An individual (58) operating a gimbap franchise in Bangbae-dong, Seoul, said, "I tried to save on labor costs by hiring foreign workers, but they struggled and couldn't properly roll gimbap since it was unfamiliar to them," adding, "I can’t employ several people like before, so I’ve stepped in to help, but this is also reaching its limits, and I'm quite concerned."
The necessity to raise gimbap prices has also driven consumers to convenience stores for their purchases. According to Statistics Korea, the gimbap eating out index has jumped by 74.5% compared to a decade ago in 2014. The price for basic gimbap representing each franchise is slightly below 5,000 won, ranging from 4,500 to 4,900 won, but if consumers order gimbap with added ingredients like cheese, crab meat, green chili, or anchovies, the cost quickly exceeds 5,000 won. In contrast, the price of gimbap at convenience stores ranges from 2,500 to 3,700 won.
A convenience store representative said, "In the past, people were skeptical about the freshness of convenience store gimbap or had an aversion to processed rice, but that is no longer the case," adding, "Recently, gimbap sales at convenience stores have increased by about 40% compared to the previous year."