Kyochon Chicken, operated by KYOCHON F&B, cut the portion size of its boneless chicken menu by about 30%. By keeping prices the same while reducing the weight, it effectively achieved a price increase.
According to the food and dining industry on the 12th, Kyochon Chicken reduced the pre-cooking weight of its boneless chicken menu the day before from 700g to 500g. The materials and supplies also changed from 100% chicken thigh meat to a mix including chicken breast. This applies across the board to 10 new items such as Mala Red Boneless and Half-and-Half Boneless, and to four existing items including Fried (Fried) Boneless and Seasoned Chicken Boneless.
This came a day after Minister Song Mi-ryeong of the Ministry of Agriculture, Food and Rural Affairs asked the food industry to cooperate on stabilizing prices. On the 10th, Minister Song met with Korea Food Industry Association President Park Jin-seon and said, "As processed foods are closely tied to people's lives, please join efforts to stabilize prices through cost reductions."
The food industry sees this as a measure arising as KYOCHON F&B works to lift its recent results. While preserving franchisees' profits is also a reason for the policy change, the analysis is that, as a listed company, the headquarters concluded it must also improve its own performance.
In Jul., Kyochon Chicken also discontinued its wing series that used domestically produced chicken and launched a Wing Box using Thai chicken, which is relatively cheaper.
KYOCHON F&B's operating profit in the second quarter of this year was 9.3 billion won, turning to the black from a 9.9 billion won operating loss in the second quarter of the previous year. Cumulative operating profit for the first half was 20.0 billion won. It rose 800% from a year earlier.
Toreore, the chicken franchise brand of NongHyup Moguchon, also changed the chicken size used for its chicken from No. 11 to No. 10 starting at the end of last month. Accordingly, Toreore's chicken weight also fell by 100g. Toreore said it had no choice but to change the chicken as chicken prices and the prices of raw and subsidiary materials rose.
In the retail industry, there is concern that if other companies follow suit, shrinkflation (shrinking quantities or sizes while keeping product prices unchanged, effectively raising prices) could spread like dominos.
Shrinkflation is common in the food industry. According to the Korea Consumer Agency (KCA), 57 products sold by major retailers such as department stores, big-box stores, and online malls saw unit prices rise due to reduced volumes in the first through fourth quarters of last year. Of these, 52 were food products, accounting for 91.2%.