Shift In Consumer Habits Shows Koreans Cutting Back On Cafe Spending In Economic Downturn – CoffeeTalk

South Koreans have been spending less in cafes due to an overall economic downturn, with cafe takings in the fourth quarter of 2024 decreasing by 9.5% compared to the previous quarter. This is the sharpest decline across all categories, surpassing the 1.7% decrease in sales at bars and a 1.8% drop at fast-food restaurants. The cafe industry had been growing for some time, with a May 2023 survey by Real Research Korea finding that 33% of Korean adults were going to cafes more often compared to 2-3 years earlier, and 48.8% were going just as often.

The lackluster economic climate is starting to take a toll on the Koreans’ love for coffee, as “economic and political uncertainties have pushed consumers to cut down on non-necessities like alcohol and coffee,” an official from the Korea Rating and Data said. The country’s real gross domestic product was initially projected to grow by 2.2% in 2024 by the Bank of Korea, but the central bank said last month that the annual growth fell below that figure to 2.2%. The state-run Korea Development Institute last week slashed the expected growth of the country’s economy this year to 1.6%, down from 2% projection it announced in November of last year.

The KoDATA report showed that 13.3% of indebted small businesses went under in the fourth quarter, with 482,000 small businesses closing down with an average of 61.85 million won ($43,000) in debt and an average arrears of 5.68 million won.

Read More @ The Korea Herald