"Even a Sashimi Restaurant with KRW 400 Million in Monthly Sales Has Little Left" Jung Junha Is "Struggling" Too... Owners Fall Behind on Loan Payments and Struggle with Labor Costs

Jung Joonha: "Think carefully before starting a business"
Food and labor costs account for 71.6% of sales
Delinquency rate on loans to individual business owners: 0.86%
"Stable operations are difficult... fears of a wave of closure

Broadcaster Jung Jun-ha, who has spent decades in the food service industry and now generates monthly sales of hundreds of millions of won, has advised people to think carefully before starting a business.

Broadcaster Jung Jun-ha, who appeared on the YouTube channel "Channel Keukeu." Screenshot from the YouTube channel "Channel Keukeu."

On October 22, Jung appeared on Kiwoom Securities’ YouTube channel "Channel Keukeu" and spoke candidly about his income from broadcasting, what led him to become self-employed, his business experience over the years, and his approach to investing.

He said he started his first business in 1997, during the Asian financial crisis, by opening an indoor street-food pub, and stressed that people should make the decision to start a business carefully, especially in times like these. Jung advised, "I tell people who think, 'Should I quit my job and start a business?' not to make that decision lightly," adding, "It doesn't always go well."

He then described how his sashimi restaurant is performing. "The Gangnam location brings in about KRW 400 million in monthly sales, but little is left as actual profit because of fixed costs such as monthly rent of KRW 32 million and labor costs of KRW 45 million, as well as the burden of ingredient prices," he said. "Who would want to eat sashimi when the weather is as hot as it was this summer? That can leave you in the red for months."

Broadcaster Jung Joon-ha appeared on the YouTube channel “Channel Keukeu.” Screenshot from the YouTube channel “Channel Keukeu.”

According to the "Report on the Management Conditions of Food Service Businesses" by the Korea Food Service Industry Association, the Ministry of Agriculture, Food and Rural Affairs, and the Korea Rural Economic Institute, food and ingredient costs and labor costs accounted for 71.6% of sales at general restaurants in South Korea in 2024. This was the first time the figure had exceeded 70% since the survey began. Those in the food service industry say that stable operations require the combined basic costs of ingredients and labor to account for around 60% of sales.

Costs rose much faster than sales. Average ingredient costs at general restaurants increased about 1.8-fold, from KRW 58.73 million in 2015 to KRW 103.77 million in 2024. Over the same period, labor costs rose 2.7-fold, from KRW 28.73 million to KRW 78.98 million. By contrast, average sales grew just 1.7-fold, from KRW 148.83 million to KRW 255.26 million.

Profitability also deteriorated rapidly. The average operating margin at general restaurants fell from 11.6% in 2022 to 8.9% in 2023 and 8.7% in 2024. Compared with 25.4% in 2015, the 2024 figure was about one-third as high.

According to the Financial Supervisory Service's "Delinquency Rates on Won-Denominated Loans at Domestic Banks at the End of August," the delinquency rate on loans to individual business owners, measured as principal or interest payments overdue by at least one month, stood at 0.86%, up 0.09 percentage points from the previous month. This was the highest rate in 13 years and three months, since the end of May 2013, when it stood at 0.92%.

Calls are growing in the food service industry for tailored support, including improvements to food ingredient distribution networks and labor cost standards suited to the realities of the industry.

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