'No Brand Burger' Sold 800,000 Units in 6 Months... Shinsegae Food's Performance Also Soars

Targeting Consumer Mind with 'Gaseongbi' Advantage
Franchise Business Transition in Second Half... Full-Scale Expansion

No Brand Burger 1st Branch located in Seogyo-dong, Seoul

[Asia Economy Reporter Choi Saeng-hye] Shinsegae Food's 'No Brand Burger' led 'cost-effectiveness (performance relative to price)' strategy has proven successful. The company has shaken off the dishonor of poor performance in its dining business division and achieved a turnaround in results. This year, it plans to focus on strengthening its foundation through expanding No Brand Burger stores and developing its franchise business.

According to the securities industry on the 11th, Shinsegae Food achieved sales of 338.8 billion KRW and an operating profit of 5.4 billion KRW in the fourth quarter of last year, growing 8.1% and 12.7% respectively compared to the same period the previous year. The food and beverage business recorded sales of 173.2 billion KRW, a 6% increase year-on-year. Sales for the food and beverage business in the first to third quarters were 144.6 billion KRW, 158.3 billion KRW, and 158.5 billion KRW respectively, showing growth each quarter.

Although Smoothie King Korea, a major consolidated subsidiary, saw its deficit widen significantly compared to the previous year, the food and beverage business results actually increased. This was due to the successful establishment of the No Brand Burger business.

In August last year, Shinsegae Food launched No Brand Burger, a renewal of its existing dining brand 'Burger Plant.' As competition in the dining industry intensified, the menu prices of Burger Plant, which were in the 4,000 to 7,000 KRW range for set meals, were lowered by nearly 1,000 KRW to secure price competitiveness. The price of the Grilled Bulgogi Burger set is 3,900 KRW, which is even cheaper than Mom's Touch's Bulgogi Burger set, known for its high cost-effectiveness, priced at 5,200 KRW.

No Brand Burger COEX Branch

No Brand Burger surpassed 100,000 units sold within six weeks of its launch and reached a cumulative sales volume of 800,000 units by last month. Daily sales exceed 10,000 units. Currently, there are a total of 15 No Brand Burger stores. Shinsegae Food plans to open about five additional directly operated stores in the first half of the year. In the second half, it will transition to a franchise headquarters business to actively expand operations. In November last year, Shinsegae Food registered the No Brand Burger disclosure document with the Fair Trade Commission's franchise business information provision system.

In contrast to No Brand Burger, the dining brands Korean buffet 'Olban' and seafood buffet 'Bonobono' are focusing on premiumization. Targeting the era of consumer polarization, they are simultaneously implementing both cost-effectiveness and premium strategies.

In December 2018, Shinsegae Food significantly upgraded the menu, service, and interior of Olban, which had been operating in Banpo-dong, Seocho-gu, Seoul, and reopened it as 'Olban Premium.' Although the usage price of Olban Premium (weekend lunch and dinner) increased by about 50% compared to before, fresh food made on the spot and premium desserts received great responses, resulting in a 38% increase in sales from January to October last year compared to the previous year. In the second half of last year, among the four Bonobono seafood buffet stores, the Samsung branch was upgraded and reopened.

Nam Seong-hyun, a researcher at Hanwha Investment & Securities, said, "Shinsegae Food is expected to maintain the same growth trend as in the fourth quarter of last year this year as well," adding, "Despite sluggish distribution channels within the group, differentiated growth is being achieved, so there is a high possibility of growth through strengthening manufacturing capabilities." A Shinsegae Food official stated, "We will continue to target the dining market with brand-specific operational strategies suitable for premium or cost-effective dining markets."

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