The Korea Herald


More eateries went out of business in 2023 than pandemic years

By Yoon Min-sik

Published : April 28, 2024 - 12:29

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A group enters a restaurant in Myeong-dong, central Seoul, April 3. (Yonhap) A group enters a restaurant in Myeong-dong, central Seoul, April 3. (Yonhap)

Roughly 1 out of 5 businesses in the food service industry here went out of business in 2023 -- a higher rate than during the years of economic slump sparked by the COVID-19 pandemic -- according to figures disclosed by a local data analysis firm.

According to Finda, 176,258 restaurants, takeout joints and food delivery locations across the country shut down for good last year, accounting for 21.5 percent of the 818,867 eateries in total. It implied that the food service industry had a worse year in 2023 than during the years of the COVID-19 outbreak, when social distancing policies forced restaurants to take fewer customers and shorten operating hours.

Between 2020 and 2022, an average of 15.03 percent of eateries closed their doors.

"Data shows that those in food service business, who endured the COVID-19 era, are going through more difficult times recently. ... Special care is necessary when entering the food service industry, since (the data) shows that even eateries in the increasingly popular sector are highly likely to go out of business," an official from Finda was quoted as saying.

Per sector, 44.38 percent of "sambap" -- referring to a style of dining that combines beef or pork with various vegetables and sauce -- eateries went out of business, marking the highest rate out of any type of eatery. It was followed by stores that provide takeout dishes for traditional rites, 37.57 of which closed last year.

About 34.53 percent of businesses dealing with prepackaged meals -- which provide dine-in service as well as takeout or delivery -- closed shop in 2023. The industry for prepackaged meals had been among the most rapidly growing in the food service, with 31.23 percent of all stores being newly launched in 2023.

In total, 18.53 percent of food service businesses were newly created in 2023.

The business closure rate found by Finda is significantly worse than the figure released by the Fair Trade Commission earlier this month, which said 14.5 percent of shops in the local food service industry had gone out of business. The government only tallies those who officially reported going out of business, while the analysis company also included those that did not file for closing down but also did not log a sales record in the past year.

While not quite as ominous as the Finda report, the figures from the FTC also imply that the food service industry fared worse in 2023 than during the pandemic era. The annual FTC reports show that the business closure rate of eateries in 2023 was worse than in any of the three years affected by the pandemic: 12.3 percent for 2020, 12.2 percent for 2023 and 12.6 percent in 2022.