Long Lines for K-Food in New York, But 6,000 Korean Restaurants Close in Seoul in a Year

Rising Costs, but Price Increases Remain Difficult
Booming Ready-to-Eat Meal Market Squeezes Out Korean Restaurants

While K-Food is enjoying worldwide popularity, the domestic Korean restaurant industry is actually contracting. Over the past year, more than 6,000 Korean restaurant business owners across the country have closed down. This trend is attributed to a combination of rising ingredient and labor costs, declining demand for dining out, and the growth of the ready-to-eat meal market.

Multiple media outlets reported on the 11th, citing the National Tax Service's Statistics Portal, that as of July this year there were 403,299 Korean restaurant business owners nationwide. This is a decrease of 6,001, or 1.46%, compared to 409,300 in the same month last year. The category of Korean restaurants includes not only general restaurants that serve dishes like baekban (set meals), jjigae (stews), and jjim (braised dishes), but also specialized noodle restaurants such as naengmyeon (cold noodles) and guksu, as well as barbecue and grilled fish restaurants.

The number of owners of Korean restaurants increased even after COVID-19. From 386,161 in 2019, the number rose to 397,465 in 2020, 410,323 in 2023, and reached up to 411,145 in 2024. However, after dropping to 406,075 last year, this downward trend accelerated this year.

An alley in Seoul filled with Korean restaurants. Photo by Yonhap News Agency

The main factor worsening the profitability of Korean restaurants is the high cost of raw ingredients. According to the Korea Rural Economic Institute’s “2025 Research Report on the Management Status of Food Service Establishments,” the average ingredient cost for Korean restaurants is 11,990 won per sales of 50,000 won, which is 15.5% higher than the industry average of 10,377 won. On the other hand, for menu items where price competitiveness is crucial, such as baekban or jjigae, it is difficult to reflect rising costs directly in the menu prices.

The low utilization rate of delivery services is also regarded as a limitation. The same survey found that 79.2% of Korean restaurants do not use delivery apps. Due to the nature of Korean cuisine, which often includes several side dishes, soup or stew, and grilled foods served together, it is not easy to adapt the meals for delivery.

Industry experts point out that the aging of restaurant owners is also a structural problem facing the Korean food industry. According to the Korea Rural Economic Institute, the average age of Korean restaurant owners was 56.7, higher than the overall restaurant industry average of 53.7. This is more than a ten-year gap compared to the average age of owners of coffee shops, which is 46.4.

The growth of the ready-to-eat meal market is another burden for restaurant owners. With a range of Korean meals — from soups and stews to bulgogi and more — now available as home meal replacements (HMR), more consumers are choosing to eat at home rather than eating out. Although K-Food is attracting attention overseas, local restaurants that have long supported the everyday consumption of Korean cuisine are now struggling between rising costs and weakening consumer demand in Korea.

Experts warn that if higher ingredient and labor costs cannot be sufficiently reflected in menu prices, deteriorating profitability could result in a vicious cycle of closures.

This content was produced with the assistance of AI translation services.