Last year, the domestic sales of the three major chicken franchise brands, bhc, BBQ, and Kyochon Chicken, were each around 500 billion won. The industry projects that it will be difficult to achieve more than last year's growth in the domestic market alone this year. Therefore, these companies plan to focus more on penetrating the overseas market this year.
According to the Financial Supervisory Service on the 20th, the separate sales of bhc under Dining Brands Group were reported at 512.7 billion won last year. This is a 4.3% decrease compared to the previous year (535.6 billion won). The sales decline was influenced by discount events related to delivery applications. A bhc representative noted, "As we were conducting events to lower consumer prices, the sales figures were recorded low," adding, "Although we provided discounts of about 24 billion won, considering this, the actual sales have practically maintained last year's levels." However, it has been pointed out that despite the price discounts, more sales were not achieved. Typically, when discount events increase, sales are expected to rise, but it ultimately means returning to square one.
Competitor BBQ's sales exceeded 500 billion won for the first time in history. BBQ announced that their consolidated sales last year were 506.1 billion won, a 6.2% increase year on year. BBQ attributed this growth to increased sales from large direct-run stores.
Kyochon Chicken first exceeded 500 billion won in sales among the three chicken franchise brands in 2021 but has since retreated. It has not yet recovered to past levels. Last year, it employed actor Byun Woo-seok as a model and introduced a new menu item, Kyochon Corn, but did not experience a substantial rebound. Kyochon Chicken recorded 480.8 billion won in sales last year, reflecting an increase of about 8% from the previous year.
There are various analyses of why the sales of the three franchise companies remain around 500 billion won. One analysis suggests that as chicken prices increased, those who used to order chicken as a meal replacement have fled. Kyochon Chicken raised its prices in April 2023, bhc Chicken followed in December of the same year, and BBQ raised prices in June last year. The price of one delivery chicken has effectively climbed into the 30,000 won range.
An industry insider noted, "The price has risen to a level that makes it expensive as a simple meal. From the consumer's perspective, the incentive to switch to simpler meals like hamburgers and gimbap has increased," adding, "It is not easy to regain customers who have switched once."
There are also many substitutes within the same category. Frozen chicken sold at large supermarkets is a prime example. In 2023, the domestic sales of frozen chicken amounted to 155.8 billion won, an increase of about 10.5% from the previous year. There have even been cases where supermarket chicken has gained popularity under brand names. Homeplus's "Dandangg Chicken" is a representative example. The prices for Dandangg Chicken are 6,990 won for fried, 7,990 won for seasoned, and 7,990 won for boneless. A representative from a large supermarket stated, "In foreign countries, it is common to stop by the supermarket on the way home to buy chicken, and it seems that this consumer pattern has somewhat settled in Korea as well."
Among those in the chicken franchise industry, there are suggestions that interest in major sports events like before has faded. Interest in the World Cup and the Olympics has diminished compared to previous years. A chicken franchise industry source commented, "In the past, whenever the Winter or Summer Olympics occurred, many events were held, and there was a substantial demand, but that is not the case anymore." In fact, only BBQ held related events during the Winter Olympics earlier this year, which included a promotion of a 5,000 won discount for their golden olive chicken if a Korean athlete won a gold medal.
As a result, chicken franchises are looking for growth opportunities overseas this year. Since domestic sales have stagnated, the core strategy is to maximize profits through efficiency in the domestic business and achieve growth abroad.
As of the end of last year, bhc had opened a total of 27 stores overseas. This year, it aims to operate 50 stores. BBQ operates over 700 stores overseas and plans to focus on expanding its presence in North America this year. Kyochon Chicken also operates 84 stores in seven overseas countries, including Taiwan and Indonesia, as of the end of last year.
A source in the chicken franchise industry said, "We believe that solely focusing on the domestic market will make it difficult to overcome sales limits," adding, "This year's performance will depend on what results we achieve in the overseas market."