As next year's minimum wage talks enter the final stage, the retail and dining industries are worried about a larger payroll burden. They are introducing unmanned and automated systems such as kiosks, table ordering, serving robots and hybrid stores (combining staffed and unmanned operations) to respond to the minimum wage hike, but on the ground, more are saying it is difficult to solve the labor cost burden with unmanned systems alone.
According to related industries on the 2nd, the Minimum Wage Commission, composed of 27 members—nine each representing labor, management and the public interest—held its 11th plenary meeting at the Government Complex Sejong that day. The labor side proposed 11,800 won per hour, and the management side proposed 10,390 won. Through the initial demand and the first, second and third revised proposals, labor lowered its proposal by a total of 200 won, and management raised its proposal by 70 won. This year's minimum wage is 10,320 won.
Industry watchers say that if the minimum wage rises sharply, profitability will inevitably worsen for dining, retail and franchise outlets, where labor costs account for a high share. With expense pressures already piling up from higher materials and supplies prices, a strong dollar-won rate and weak consumption, a minimum wage increase would further intensify cost pressure.
In a survey of 994 small and mid-size companies and small business owners by the Korea Federation of Small and Medium Enterprises, 77.6% of respondents said the current minimum wage level is a burden on management. They also picked "reducing new hiring" as the first response they would consider if the minimum wage exceeds a tolerable level.
In the end, the dining industry is focusing on automation investments to cut labor costs. These include kiosks, table ordering, QR code ordering and serving robots. Convenience stores and bakeries are expanding hybrid stores that run unmanned only during nighttime hours.
According to the "2024 service industry survey results" released by the Ministry of Data and Statistics (MODS), about 80,000 restaurants and bars used unmanned payment devices in 2024, up 17.6% from 2023 (68,000). For the first time, the share of restaurants and bars in Korea operating unmanned payment devices topped 10% out of a total 789,000 restaurants and bars. In a Korea Employment Information Service survey, 55% of companies that introduced kiosks cited "labor cost savings" as the reason.
While unmanned operations are a realistic option, some note they are not a perfect solution to labor costs. A dining industry official said, "Unmanned operations are feasible mainly for large franchises whose headquarters have established systems and operating frameworks," adding, "General restaurants face practical difficulties, so many are now considering how to reduce staff and run on a small scale."
The official also said, "With the labor shortage compounding the problem, even offering wages well above the minimum for kitchen staff makes hiring difficult," explaining, "In the end, store owners will have to work on-site themselves, or family-run operations will inevitably increase."
Another dining industry official said, "Dining involves many tasks, such as serving and kitchen work, that necessarily require people, so fully unmanned operations are virtually impossible," adding, "The reason to introduce smart kitchens or cooking automation systems is not to completely replace people but to ease owners' burdens, even a little."
In practice, convenience store chains such as GS25, CU and E-MART 24 mostly use a hybrid model, running unmanned only at night. A convenience store industry official said, "Stores in outlying areas with weak nighttime sales are adopting hybrid operations to reduce labor costs," adding, "However, items with strong nighttime demand, such as alcohol and cigarettes, cannot be sold in unmanned stores, and staffed stores still have advantages in revenue competitiveness and stability, so the recent growth of hybrid stores has slowed."
Abroad, there are even cases where the expansion of unmanned stores is slowing. In the United States, Amazon reduced some unmanned stores such as "Amazon Go," and in Japan, Daiei under Aeon withdrew from its unmanned store business "Cashierless Go." The assessment is that profitability fell short of expectations relative to initial investment and maintenance costs.
Lee Jong-u, a professor of retail marketing at Namseoul University, said, "If the economy is strong and the industry's profitability is improving, a minimum wage increase can be borne, but when both consumption and employment are depressed as they are now, the labor cost burden inevitably grows," adding, "Ultimately, minimum wage hikes can worsen the profitability of not only large franchises but also small business owners and small and mid-size companies, and the possibility of reduced jobs for young and low-skilled workers must also be considered."