Are Coffee Shops and Eateries Shrinking in Q1 Due to Sluggish Consumption in S. Korea?
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Synopsis
South Korea faces a decline in coffee shops, eateries, and convenience stores amid economic challenges. This article explores the implications of shrinking numbers and the factors contributing to this trend, offering insights into the future of the food and beverage industry in the region.
Key Takeaways
- Decline in Coffee Shops: For the first time since 2018, the number of coffee shops has decreased.
- Economic Challenges: Prolonged economic downturn and weak demand are key factors.
- Fast Food Chains: There is also a decline in fast food establishments.
- Small Business Struggles: High commission fees and market saturation are burdening owners.
- GDP Forecast: The Bank of Korea may lower GDP growth projections.
Seoul, May 25 (NationPress) The number of coffee shops, eateries, and convenience stores in South Korea is experiencing a decline amid a prolonged economic downturn and weak domestic demand, as indicated by recent data released on Sunday.
Data from the National Tax Service (NTS) reveals that there were 95,337 cafes operating in the first quarter, a decrease of 743 stores compared to the same period last year, according to reports from Yonhap news agency.
This is the first instance of a decline in coffee shop numbers since record-keeping commenced in 2018.
In 2018, the number stood at 45,203 cafes, with a sharp increase to 53,102 in 2019, followed by 62,916 in 2020, 72,847 in 2021, 85,609 in 2022, and peaking at 93,913 in 2023.
The number of coffee shops reached a high of 96,080 last year before witnessing a drop this year.
This downward trend is also reflected in the restaurant sector, with fast food chains reducing to 47,803 in the first quarter, a drop of 180 from the previous year.
Furthermore, Korean and Chinese eateries have seen reductions of 484 and 268, respectively.
Convenience stores also faced a decline, down by 455, bringing the total to 53,101 shops by the end of March.
Industry experts attribute this trend to a significant number of retirees entering self-employment and subsequently closing their businesses due to market saturation and declining domestic demand. Some also highlight the burdensome commission fees imposed by delivery platforms.
According to the Korea Credit Data (KCD), the average earnings for small business owners in the first quarter were approximately 41.79 million won (US$30,558), reflecting a 0.72 percent decrease from the previous year.
In related news, the Bank of Korea (BOK) is anticipated to lower its gross domestic product (GDP) growth forecast from the current 1.5 percent to around 1 percent or lower in the forthcoming rate-setting meeting on Thursday, based on a recent survey of seven economists conducted by Yonhap News Agency.
Point of View
It is crucial to approach the current decline in the number of coffee shops and eateries in South Korea with an unbiased lens. The data reflects broader economic challenges, including market saturation and changing consumer behaviors. It’s essential to consider these trends within the context of national economic health and support for small businesses in our region.
NationPress
08/06/2025
Frequently Asked Questions
What is causing the decline in coffee shops in South Korea?
The decline is attributed to prolonged economic slowdowns, sluggish domestic demand, market saturation, and high commission fees from delivery platforms.
When did the number of coffee shops in South Korea start to decline?
The number of coffee shops in South Korea began to decline in the first quarter of 2023, marking the first decrease since record-keeping started in 2018.
How much did small business sales decrease in Q1?
The average sales of small business owners in the first quarter were approximately 41.79 million won, down 0.72 percent from the previous year.
What are the latest GDP growth forecasts for South Korea?
The Bank of Korea is expected to revise down its GDP growth forecast from 1.5 percent to around 1 percent or lower.
How many coffee shops were operating in South Korea in Q1 2023?
There were 95,337 coffee shops in operation in South Korea during the first quarter of 2023.
