Domestic burger franchises are continuing strong results despite high inflation and sluggish consumption. As dining-out prices rise, demand has increased for burgers, which offer a relatively inexpensive meal. Rather than resting on their existing businesses, burger companies are rolling out new growth strategies.
According to the industry on the 31st, major domestic burger companies expanded both scale and profitability last year. McDonald's Korea posted sales of 1.4313 trillion won last year, up 14.5% from a year earlier. Operating profit rose 523% to 73.2 billion won.
BKR, which operates Burger King and Tim Hortons, recorded sales of 892.2 billion won and operating profit of 42.9 billion won, up 12.6% and 11.7%, respectively. Mom's Touch also posted sales of 479 billion won and operating profit of 89.7 billion won, up 14.6% and 22.2%, respectively. Consumer payment amounts at stores nationwide surpassed 1 trillion won for the first time. KFC Korea's growth was even steeper. Last year's sales came in at 378 billion won, up 29.3% from a year earlier, with operating profit up 50.6% to 24.7 billion won.
The industry views high inflation as paradoxically favoring the burger market. As spending more than 10,000 won on a meal at restaurants has become common, burgers, which allow diners to eat at a relatively low price, have gained price competitiveness.
◇ From 2,500-won burgers to 89,000-won courses
Despite strong results, companies are trying new changes. As brands and menus diversify, it has become difficult to pursue sustained differentiation with new products alone, and the burden of materials and supplies and labor costs is also growing. If the expense burden continues to be reflected in prices, there is concern that burgers' strength as an "affordable meal" could weaken.
The most notable contrast is the divergent strategies of Burger King and No Brand Burger, operated by Shinsegae Food. BKR, Burger King's operator, recently unveiled the world's first flagship store, "Flame Ground," in Seongsu-dong, Seoul. In a 10-seat private dining space inside the store, it serves a seven-course meal, "The Gastro," which reinterprets Whopper ingredients and Burger King's flame-grilling method.
The price is 89,000 won per person. Although it costs several times more than a regular burger set, all seats for a month were booked after reservations opened. Instead of sharply raising the price of the existing Whopper, the brand is offering a new experience in a separate space in an attempt to extend Burger King's territory into fine dining.
By contrast, No Brand Burger lowered the price barrier. The "Amazing Bulgogi," priced at 2,500 won à la carte, surpassed 500,000 cumulative sales in about three months after launch. The four-item "Amazing" series, priced under 5,000 won, also topped 3 million in cumulative sales within a year of launch.
An industry official said, "If Burger King is widening the upper end of price and service that consumers can experience at a burger brand, No Brand Burger is lowering the lower end of price to expand the consumer base," adding, "The directions are the exact opposite, but the goal is the same in that they broaden the market the brands can target."
◇ Some brands are seeking growth opportunities overseas
Mom's Touch and Lotteria are looking for new growth opportunities overseas. Mom's Touch opened its first company-operated store in Shibuya, Tokyo, in 2024. The Shibuya store recorded 100,000 cumulative visitors within 40 days of opening. The company is now pushing to expand in Japan while also extending its overseas footprint to Mongolia, Thailand and Laos.
Lotteria also entered the burger heartland by opening its first store in Fullerton, California, in Aug. last year. In Feb. this year, it opened a store at Jewel Changi Airport in Singapore. It is differentiating itself from global players by promoting domestically proven menu items such as the bulgogi burger, shrimp burger and bibim rice burger as "K-burgers."
Recent changes in the burger industry are seen as moves to secure the next growth engines while the growth trend continues. In particular, as it becomes harder to achieve sustained differentiation with products alone, how each company expands the brand asset it has built over a long period is becoming more important. For example, Burger King is extending its strength in flame-grilling into the dining experience, while No Brand Burger is further reinforcing its identity of value for money.
An industry official said, "As products and menus have diversified in the burger market, it is not easy to create sustained differentiation with a single new product," adding, "Going forward, competition among companies will intensify over how far they can extend brand assets not only in price but also in store experiences and overseas business."