Outlook remains bleak for the Korean dining industry, hit by multiple whammies from sinking consumer sentiment, political unrest, anti-graft law, and spread of livestock viruses in a slow-moving economy.

According to data released by the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corp. on Friday, the country’s restaurant business index stood at 65.04 in the fourth quarter last year, down from 67.51 in the previous quarter.

The index measures performance during the past three months based on the same period of the previous year (100).

By sector, business index for the cafeteria business dropped from 74.23 to 69.46, chicken stores from 66.00 to 60.26, bakery business from 69.29 to 64.90 and snack and street food diners from 68.53 to 62.76.

The first-quarter would likely be worse. Consumer confidence in the country slipped in January for the third straight month to hit its lowest level in nearly eight years. Last month, the Bank of Korea (BOK) also cut the nation’s gross domestic product (GDP) outlook for this year to 2.5 percent from 2.8 percent last estimated in October, citing weakening domestic demand due to political and external uncertainties.

Private spending has been also dampened since the new powerful anti-corruption law designed to change the way business is done in Korea through customary entertaining and gift exchange took effect September. The local food industry also has been hit hard by a supply shortage of eggs amid the nation’s worst-ever avian influenza outbreak. Outbreak of foot-and-mouth disease is also likely to add woes to the livestock and restaurant business.

As for future business index, an indicator of a projected business performance over the next three to six months, the catering service business showed the lowest number of 59.51, followed by chicken restaurants of 58.54.

By Kim Gyu-sik

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