A worker at a restaurant in central Seoul makes boxed lunches to be delivered on Aug. 31, 2020. (Yonhap)
SEOUL, June 20 (Korea Bizwire) — Delivery-only restaurants are facing a life-or-death situation due to the lifting of social distancing rules and the sky-high prices of food materials.
Owners of such restaurants that opened during the peak of the pandemic from late last year to early this year are giving up operations or opting to sell their business.
In an online community for self-employed small business owners, dozens of posts expressing a desire to sell their business are uploaded every day.
According to data tracker IGAWorks, the number of users of food delivery apps declined by about 25 percent last month compared to the figure marked in March, while that of eating out apps jumped by about 60 percent during the same period.
Another factor that has exacerbated the crisis facing delivery-only restaurants, also known as “ghost kitchens,” is the soaring cost of food materials, including cooking oil, pork, vegetables, noodles and flour.
However, other analysts suggest that the crisis facing ghost kitchens is temporary since delivery culture is already established to some extent.
This view stresses that delivery-only restaurants have sprung up everywhere after the pandemic, resulting in the saturation of the market, and it is only inevitable for some delivery-only restaurants to shut down.
“When a new type of business emerges and gains popularity, similar businesses spring up everywhere. Such fever loses steam over time, resulting in a string of business closures. Such a phenomenon is not a strange one,” said Park Myung-hoon, a 41-year-old owner of a fried chicken restaurant owner that offers both eat-in and delivery services.
“However, it’s too early to predict the future of delivery-only businesses since people just returned to their normal lives.”
J. S. Shin (js_shin@koreabizwire.com)
