The 'dual pricing system,' where prices on delivery apps are higher than in-store prices for dining options like chicken and hamburgers, is spreading. As the burden of expenses, such as delivery fees and labor costs, increases, the restaurant industry is showing signs of implementing price differentiation.

According to the restaurant industry on the 29th, many major franchise stores, including Mom's Touch, BHC Chicken, and Jadam Chicken, are applying different prices for the same menu items in stores and on delivery apps. Typically, delivery orders are about 1,000 to 3,000 won more expensive.

Mom's Touch Olaidong DT Store. /Courtesy of Mom's Touch

Since February of this year, a significant number of Mom's Touch franchises have increased their delivery app prices by an average of 15%. The representative menu item, the 'Cyber Burger Set,' costs 7,300 won in stores but is sold for 8,500 won on delivery apps.

The leading chicken franchise BHC has also seen a sharp increase in delivery price adjustments at its franchises. In the Seoul area, about two-thirds of the stores have raised their delivery menu prices, with core items like Ppo-ring-kul and Quasak-king priced at 23,000 won for delivery, which is 2,000 won higher than the in-store price of 21,000 won. Some stores have raised prices for combo or boneless products to as much as 25,000 won.

Although BHC's headquarters stated it has never officially encouraged price differentiation, it changed its operational policy this month to allow franchise owners to autonomously adjust delivery app prices without headquarters approval.

Jadam Chicken also increased its delivery prices uniformly by 2,000 won at the headquarters level in April, and Gubne Chicken has made price adjustments in some stores in Seoul and Gyeonggi Province. Although BBQ and Kyochon have no immediate plans for price increases, they are reportedly monitoring the situation.

Burger franchises are seeing a similar trend. The 'Whopper Set' at Burger King costs 9,200 won in stores, but 10,600 won on delivery apps, which is 1,400 won more. Lotteria added 1,300 won to its delivery prices last year, and KFC, Popeyes, and McDonald's are also largely using the dual pricing system.

This price differentiation is because delivery fees and costs are eroding revenue. According to the restaurant industry, about 30% of the food cost for each delivery app order goes towards fees and delivery costs.

According to Statistics Korea, while consumer prices have risen 16% over the past five years, food prices in the restaurant industry have increased by 25%, a steeper rise. By menu item, the highest increase rates were for kimbap (38%), hamburgers (37%), and chicken (28%).

An official from the Korea Restaurant Association said, "Unless the structure of delivery fees changes, self-employed individuals have no choice but to raise prices to make up for their revenue," and noted that "the spread of the dual pricing system ultimately leads to a burden on consumers."