Enhanced Social Distancing... Coffee and Bakery Customers Prefer Delivery Over In-Store Dining

Franchise Store Visits Banned in Seoul Metropolitan Area, Sales Take Direct Hit
Delivery Demand Surges... Coffee and Dessert Sales on Delivery Apps Rise, Bakery Delivery Also Popular
Food Industry Bakery Demand Soars Accordingly

On the afternoon of the 30th of last month, when enhanced social distancing measures were in effect, a coffee franchise store located in Songpa-gu, Seoul, showed a quiet scene.

[Asia Economy Reporter Choi Saeng-hye] As social distancing measures were raised to level 2.5, the number of consumers visiting franchise coffee shops and bakery hall stores decreased, while delivery demand strengthened. Bakeries sold by food companies through online and mart channels are also benefiting from this.

According to the food and dining industry on the 4th, many franchise coffee shops offering delivery services saw an increase in delivery sales since the 30th of last month. Due to the upgrade in social distancing levels, franchise coffee shop hall store operations have been banned until the 6th, leading to an increase in consumers ordering coffee or beverages at home or office.

Ediya, a coffee franchise with 3,000 branches nationwide, saw delivery sales at all franchise stores increase by about 20% from August 30 to September 2 compared to the previous week of August 23-26. Not only Ediya, but the number of orders in the cafe and dessert category on the delivery app Baedal Minjok, which hosts many coffee franchises such as Coffee Bean, Angel-in-us, and The Venti, also increased by 34.2% during the same period compared to the previous week. Coffee Bean and Hollys Coffee, responding to increased untact (contactless) demand, recently signed a business agreement with the delivery app Yogiyo and are expanding the number of stores offering delivery services. Hollys Coffee currently provides delivery services at about 100 stores, and Coffee Bean at 102 stores.

After the social distancing level was raised to 2.5, hall sales at franchise coffee shops sharply declined. A coffee shop A, which does not offer delivery services, saw sales decrease by about 15% from August 30 to September 2. Coffee shop B experienced a double-digit increase in delivery sales, but due to severe damage to hall sales, overall sales during this period dropped by 26%. A representative of coffee shop C, with about 90% of its branches franchised, said, "Since hall store operations were banned, we have suffered serious damage," adding, "Most franchisees are individual business owners and are closely monitoring the situation."

Franchise bakeries also saw an increase in delivery demand instead of hall visits. An industry insider said, "Contrary to popular belief, demand for coffee shops has not shifted to bakeries," adding, "People have reduced outings altogether and feel burdened by procedures such as signing in when visiting stores, so recent sales have rather decreased."

On the other hand, the order volume for Paris Baguette's own delivery service, 'PABA Delivery,' has increased by more than 50% compared to July. Paris Baguette has also taken decisive steps to strengthen pickup and delivery services together with Baedal Minjok and Yogiyo since the implementation of social distancing level 2. Until the end of social distancing level 2.5 on the 6th, Baedal Minjok is running discount promotions.

Shinsegae Food 'Milk and Honey Sandwich'

Meanwhile, the food industry is also gaining from bakery sales due to the upgrade in social distancing levels. Shinsegae Food reported that daily sandwich sales increased by 6% compared to the previous week since the 30th of last month. During the third week (August 17-23) when social distancing level 2 was fully implemented in the metropolitan area, sandwich sales increased by 16% compared to the previous week (August 10-16). In August, the seventh month since the COVID-19 outbreak, daily sales increased by 21% compared to January.

From August 30 to September 2, CJ CheilJedang's Gourmet Bakery sales increased by more than 70% compared to the same period the previous week. Gourmet Bakery consists of two types of baked goods suitable for a simple meal and five types of raw dough snacks. During the same period, Ourhome's bakery sales also increased by 56%. Frozen raw dough products such as croissants, cinnamon rolls, and maple pecan are popular. These products were launched by Ourhome in July and have shown a sharp sales increase since release due to the COVID-19 situation.

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