Economic Recession Deepens Social Polarization
Five Guys Welcomes Around 2,000 Visitors Daily in Japan
Homeplus Launches Cost-Effective Dangdang Burger
As the recent economic downturn continues, polarization is occurring in the hamburger market as well. While high-priced overseas premium burgers are rushing into the domestic market, large supermarkets have responded by launching ultra-low-priced burgers.
According to Hanwha Galleria on the 1st, the daily average number of visitors to Five Guys is about 2,000, maintaining its popularity. On the opening day, there was even an opening rush that caused the streets to be paralyzed with crowds, but on-site congestion disappeared as waiting lists were managed through the table booking application (app).
Five Guys pursues a premium strategy with high-priced menus. In fact, Five Guys does not have a separate set menu. The price of a regular burger ranges from 13,400 KRW to 17,400 KRW. If you order a burger, fries, and a drink as in a typical set menu, the minimum cost is 24,200 KRW. Because of this, it is sometimes evaluated as somewhat more expensive than competing brands.
Five Guys started in Virginia, USA in 1986 and began overseas expansion in 2002. Currently, it operates about 1,800 stores in 23 countries including the UK, France, and Germany. South Korea is the sixth country in Asia after Hong Kong, Singapore, China, Malaysia, and Macau. FG Korea plans to operate more than 15 stores within the next five years.
Large supermarkets have challenged the market with cost-effective (price-performance) burgers. Homeplus launched Dangdang Burger following Dangdang Chicken. The price of Dangdang Boneless Chicken Twin Burger (2 pieces) is 4,990 KRW, which is only 2,495 KRW per piece. This is about one-sixth the price of overseas premium burgers and about one-third the price of major franchise burgers. This product uses un-frozen bread for a soft initial texture, and the smoked mustard sauce gives a subtle grilled flavor. However, it contains no vegetables such as tomato or lettuce. It is convenient to purchase a pack of salad (100g) for 1,590 KRW to accompany it, and even when the combined price is calculated, it only costs 3,290 KRW per piece.
Homeplus succeeded in securing raw materials after searching nationwide for over half a year for partners who can supply high-quality domestic refrigerated meat in large quantities. Also, unlike franchise burgers, there are no individual advertising costs or headquarters royalties, making it possible to sell at a low price. A Homeplus official emphasized, “We planned a boneless burger, a frequently sought-after food by customers, to help alleviate the burden of rising prices. We will continue to launch high-quality, cost-effective new menus and contribute to price stabilization.”
Professor Kim Si-wol of Konkuk University’s Department of Consumer Studies diagnosed, “Social consumption polarization has always existed, and polarization is also occurring in individuals’ consumption areas. There is a change in values where consumption increases on what people want, such as new products and well-being, while other consumption is relatively reduced.”
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