Budget burger battle breaks out as consumers beef about inflation

Industry

Published: 07 Jun. 2022, 17:23 Updated: 07 Jun. 2022, 19:29

Budget burger battle breaks out as consumers beef about inflation

Burgers are sold at the 2,000-won level at No Brand Burger's Myeong-dong branch. [KIM MIN-SANG]

Budget burger joints are multiplying as inflation hits Koreans hard.

No Brand Burger, a Shinsegae Food chain, sells its cheapest sandwich, the NBB Burger, for 2,900 won ($2.3).

It has been growing fast since opening in August 2019. Within 20 months, it had 100 outlets. It expects to have 150 by August and 220 stores by the end of the year.

The brand has opened its first Daejeon location, according to Shinsegae Food on Monday.

The 226-square-meter (2,433-square-feet) restaurant with 75 seats opened in Seo District in Daejeon is near the city hall and the court.

"We are first planning to build brand awareness by opening a large directly-managed store in an area with high rents and then open franchises to raise marketing efficiency and cut logistics cost," said a spokesperson for Shinsegae Food.

The company receives over 1,000 inquiries every month to open franchises, but shops will be limited to metropolitan areas, and the Yeongnam and Chungcheong regions.

Compared to other brands, opening a No Brand Burger franchise is cheaper.

The total cost to open a 132-square-meter No Brand Burger shop including interior design and furniture is 223 million won, according to Shinsegae Food's website.

This is lower than Lotteria's 293 million won.

No Brand Burger operators are able to buy ingredients at stable prices through Shinsegae Food's product manufacturing facilities and warehouses.

According to Shinsegae Food, 4,200 tons of burger patties were produced at its factory in North Chungcheong last year.

"We are improving the distribution structure by promoting different methods, such as contract farming and farm trusts," said a spokesperson for Shinsegae Food.

The cost of dining out is increasing at the fastest rate in 24 years.

The dining-out price index rose by 7.4 percent last month on year, according to the Korean Statistical Information Service. This was the highest since the 7.6 percent reported in March 1998.

With the rising dining-out price index, other burger brands are holding promotions to bring in more customers.

Lotteria's L7 Hongdae branch is completely self-service. [NEWS1]

Lotteria is holding a buy-one-get-one-free event through its dine-out mobile application, Lotte Eats. Customers are also able to make reservations and pick up their food via the drive-thru using the application.

The brand has also reduced human resources costs by building a smart store in Mapo District in western Seoul. Customers will not encounter any workers during order placement and pick up as kiosks are installed.

Isaac Toast, a Korean sandwich store, introduced the Isaac Burger, with burgers as cheap as 4,100 won, last July and is expanding.

Kyochon F&B, a fried chicken chain, is selling its Kyochon Real Chicken Burger at 4,900 won.

BY KIM MIN-SANG [cho.jungwoo1@joongang.co.kr]