Budget pizza chain raises prices as food and dining industry begins second-half hike wave

Ogu Pizza (formerly Ogu Rice Pizza), a budget pizza brand operated by Pizza & Company, raised prices on its key pizza menu items by up to 3,000 won Monday. Food and dining companies that had held back on price increases under indirect government pressure to stabilize inflation are now raising prices one after another in the second half of the year, citing rising ingredient costs.

According to industry sources Tuesday, Ogu Pizza raised prices on its main pizza and side menu items by 400 to 3,000 won starting Monday. Classic pizzas — including combination, cheese and pepperoni — went up by 1,000 won each for both regular and large sizes. The regular-size combination pizza rose from 9,900 won to 10,900 won ($7), while the large size increased from 12,900 won to 13,900 won.

Among premium pizzas, the Yukhaegong Gold pizza regular size climbed from 16,900 won to 19,900 won, and the large from 20,900 won to 22,900 won. The Bulgogi Shrimp pizza regular size also rose by 2,000 won, from 14,900 won to 16,900 won. Side menu items including Ogu Rice Cheese Tteokbokki and cream spaghetti went up by 400 to 500 won.

The increase marks Ogu Pizza's first price hike in three years. A Pizza & Company official said rising costs across the board — from key ingredients such as cheese and meat to labor, logistics and rent — had steadily added to the burden on franchise operators. "The head office comprehensively reviewed franchise owners' requests, the ingredient composition of each menu item, cost pressures and market conditions, and adjusted prices on some items accordingly," the official said.

Ogu Pizza is not the first in the pizza industry to move. Domino's Pizza and Papa John's Korea raised prices on beverages including Coca-Cola and Sprite in May and June, respectively. Baek Boy Pizza, operated by The Born Korea, raised beverage prices by 12.0 percent starting in June, along with prices on 12 pizza items by 20.2 percent and seven pasta and side items by 15.3 percent.

Other chains say they have no immediate plans for further increases. A Papa John's Korea official said the company has no price hike plans at this time. A Pizza Hut official similarly said no price increase is under review, adding that the company is working closely with key suppliers to negotiate against raw material cost increases "in the best interests of consumers and franchisees."

The food and dining industry has been pulling the trigger on price increases around the June 3 local elections. Companies had held off during the election period under government pressure to keep prices in check, but prolonged tensions in the Middle East — driving up commodity prices and exchange rates — have made ingredient costs increasingly difficult to absorb.

Nongshim plans to raise factory prices on products across 43 brands by an average of 5.8 percent starting Saturday, covering major cup ramyun items such as Yukgaejang Bowl and Shin Ramyun Cup, snacks including Shrimp Crackers and Honey Twist, and beverages such as Welch's. BR Korea plans to raise prices on 39 Dunkin' donut varieties by an average of 6.5 percent starting Sunday. Coca-Cola Beverage Korea will also raise factory prices on 52 convenience store products — including Coca-Cola, Sprite and Fanta — by 100 to 300 won starting Saturday.

Industry insiders say price increases are likely to continue through the second half of the year. Raw material costs keep rising on the back of high oil prices and a weak won stemming from the prolonged Middle East conflict. There is typically a lag of several months before cost increases feed through to retail prices, and with the high exchange rate showing no signs of easing, cost pressures are not expected to let up anytime soon.

"With global instability, there is virtually nothing that has not gone up — exchange rates, oil prices, raw material costs, logistics fees," one industry official said. "Companies have tried as hard as they can to hold off on increases, but in the second half, many will ultimately find they can no longer hold the line."