"One Meal Costs Less Than 10,000 Won" Crowds Flock In... Hamburger Industry Posts Record-High Results

Sales and Profits Rise Together for Lotteria, Burger King, and Others

Expansion of Delivery and Takeout Consumption Builds Stable Revenue

Mom’s Touch, with Numerous Franchises, Achieves 18% Profit Margin

Major dining companies operating leading hamburger brands such as Lotteria and Burger King achieved strong results last year. As the overall price of dining out increased, hamburgers solidified their status as a "cost-effective meal." The combination of affordable prices and convenient consumption methods elevated hamburgers as the representative dining-out menu in an era of high inflation, resulting in simultaneous increases in both sales and profits for major companies.

According to the dining industry on April 2, Lotte GRS, which operates Lotteria, recorded sales of 1.1189 trillion won and operating profit of 51 billion won last year. Sales increased by 12.4% year-on-year, and operating profit rose by 30.6%. It is the first time in eight years since 2017 that the company’s sales surpassed 1 trillion won. Burger King's operator BKR also achieved its highest-ever sales. BKR posted sales of 892.2 billion won and operating profit of 42.8 billion won, up by 12.6% and 11.7%, respectively. New products such as "Crisper" and the strategy of strengthening low-priced menus like "All Day Snack" boosted performance. Expanding both premium and budget product lineups, in addition to the existing Whopper-focused portfolio, also broadened the customer base and contributed to these results.

KFC Korea and Mom’s Touch & Company also reported record results. KFC’s sales last year rose about 29% to 377.9 billion won, and operating profit climbed 50% to 24.7 billion won. Mom’s Touch posted sales of 479 billion won, up 14.6%, and operating profit of 89.7 billion won, up 20%.

Lotteria store. Provided by Lotte GRS.

Improvement in Operating Margin, Mom’s Touch Leads the Pack

Profitability also improved. Lotte GRS’s operating margin rose from 2.3% in 2023, to 3.9% in 2024, and to 4.6% last year. This was due to economies of scale from increased sales, combined with cost-efficiency measures. BKR’s operating margin also increased from 3.2% to 4.8% during the same period and maintained 4.8% last year.

KFC recorded the largest improvement. Its operating margin, which was only 1.1% in 2023, surged to 5.6% in 2024 and further to 6.5% last year. Although the proportion of selling, general, and administrative expenses exceeded 60%, the pace of sales growth outstripped this, resulting in a relatively lower fixed cost burden.

Mom’s Touch recorded the highest operating margin. Mom’s Touch maintained strong profitability, with an operating margin of 18.1% in 2023, 17.5% in 2024, and 18.7% last year. This was influenced by its franchise-centered structure, where franchisees bear the cost of operating stores, while the headquarters secures revenue through royalties and supplying ingredients. In fact, the ratio of selling, general, and administrative expenses to sales at Mom’s Touch is around 18%, significantly lower than the 40% to 60% at Lotte GRS and BKR.

Meals Under 10,000 Won, Capturing Dining-Out Demand

The industry attributes this improvement in results to the expansion of demand for "cost-effective dining out." As prices of major dining-out menus such as chicken, Korean food, and street food have generally increased, hamburgers have emerged as an alternative with a relatively lower price burden. In particular, the ability to have a meal for under 10,000 won has stimulated consumer spending.

The spread of delivery and takeout-focused consumption also played a role. Hamburgers are recognized as a representative menu item suitable for delivery and takeout due to their short preparation time and high level of menu standardization. The stable sales structure was maintained as contactless consumption, which became established after COVID-19, continued.

Additionally, segmenting the product lineup by price range from budget to premium, and consistently launching new products, further supported sales growth. An industry official said, "Hamburgers have clearly established themselves as a beneficiary sector amid high inflation," adding, "With the trend of high prices continuing, the improvement in results is expected to persist this year as well."

This content was produced with the assistance of AI translation services.