Fast Food, Once Quick in Packaging and Delivery, Now Racing Alone

Impact of COVID-19... Fast Food Alone Grows Amid Severe Slump
Strengthening Delivery and Takeout Services to Keep Up with Untact Trend

A customer is purchasing a takeout order at the No Brand Burger store in Seongsu-dong, Seongdong-gu, Seoul. Photo by Shinsegae Food

[Asia Economy Reporter Lee Seon-ae] Amid the severe downturn in the dining-out market caused by the impact of the novel coronavirus infection (COVID-19), the fast food industry has continued to experience "solo growth" thanks to an increase in delivery and takeout customers.

"Please pack my hamburger"

According to Shinsegae Food on the 21st, following the re-escalation of COVID-19 and the raising of social distancing measures to level 2.5 in the metropolitan area and level 2 nationwide on the 8th, the daily delivery orders at 15 stores testing No Brand Burger increased by 27% compared to the previous month. Additionally, takeout purchases at stores rose by 8% month-on-month, with the combined share of delivery and takeout sales exceeding 65% of total sales. Based on this increase in delivery and takeout sales, Shinsegae Food opened 10 new No Brand Burger stores last month alone, surpassing a total of 60 stores.

Shinsegae Food analyzed that the growth of No Brand Burger is due to the prolonged COVID-19 situation, where cost-effective dining menus are gaining attention, and fast food offers the advantages of reasonable prices, takeout, and delivery, allowing consumers who prioritize cost-effectiveness and convenience to enjoy meals comfortably and safely.

A Shinsegae Food official stated, "While other dining brands are struggling as customers increasingly avoid visiting stores due to COVID-19, No Brand Burger is experiencing steady growth with a continuous influx of delivery and takeout customers. Since COVID-19 is expected to continue until the first half of next year, we plan to expand our footprint nationwide by utilizing delivery services in the first quarter of next year and open up to 170 stores by the end of the year."

Korea McDonald's has also shown strong performance despite COVID-19. According to McDonald's, sales from January to November this year increased by 7.5% compared to the same period last year. This growth is attributed to the enhanced non-face-to-face services implemented after the outbreak of COVID-19. In fact, McDonald's expanded its breakfast menu, McMorning delivery service, to delivery apps such as Baedal Minjok and Yogiyo, and strengthened its McDrive system?a drive-thru system allowing customers to order, pay, and pick up without leaving their cars?through various marketing efforts and convenience improvements, which proved effective.

Exclusive App 'Lotte Eats' Captures Non-Face-to-Face Trend

Lotte GRS, which has focused on efficient operation of its integrated brand application and strengthening delivery menus, has also maintained steady sales growth. In February, Lotte GRS launched Lotte Eats, an integrated app that allows orders from multiple brands previously operated independently through separate apps. This move was based on the judgment that competitiveness through digital transformation is essential to seize the advantage in the rapidly expanding non-face-to-face trend caused by COVID-19.

Lotte Eats is a brand-integrated app focused on customer convenience, enabling the use of five brands?Lotteria, Angel-in-us, Krispy Kreme Doughnuts, TGI Fridays, and Villa de Charlotte?within a single app. Notably, by expanding the delivery app service from Lotteria alone to all five brands, it strengthened the ordering system for both online and offline stores with features such as ▲delivery service ▲reservation and table ordering service ▲chip (stamp) accumulation function. Since February, Lotte Eats has shown a stable position with an average monthly order growth rate exceeding 50%.

Mom's Touch also offset the gap in in-store customers with increased delivery sales, which have a higher average order amount, and the popularity of its new product, the Nashville Burger & Chicken. The delivery sales ratio of Mom's Touch increased from the low 30% range in March to 40% in June and averaged 45% in the third quarter. Due to this impact, Mom's Touch opened more than 50 new stores this year alone and is expected to surpass 1,300 stores by the end of the year.

An industry insider said, "Fast food is expected to continue to be popular among consumers who prioritize reasonable prices and safety in dining, as delivery and takeout orders are easy and relatively affordable for a meal. As delivery and takeout services become routine, competition among companies through expanding consumer touchpoints, reasonable pricing, and differentiated menus is expected to intensify."

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