Low-Cost Coffee Chains Add 4 Stores Daily
Coffee Specialty Shops Surpass 100,000 in 2022
The number of coffee specialty stores nationwide has surpassed 100,000. In particular, the popularity of low-priced coffee has attracted attention. According to research, stores of the three major low-priced coffee brands (Mega Coffee, Compose Coffee, Paik’s Coffee) have increased by about four per day.
According to the Fair Trade Commission's franchise business status statistics on the 30th, the number of nationwide franchise stores of the three major low-priced coffee brands increased by 37.3% (1,436 stores) from 3,849 at the end of 2021 to 5,285 at the end of 2022. During the same period, the number of domestic coffee specialty stores counted by Statistics Korea increased by 4,292 (4.5%) from 96,437 to surpass 100,000.
Among these, the number of stores of the three low-priced coffee companies exceeded 7,000, with Mega Coffee ranked first, owning a total of 3,000 stores. Following were Compose Coffee (2,500 stores) and Paik’s Coffee (1,600 stores).
Experts believe that the recent popularity of low-priced coffee is rooted in the trend of seeking cost-effectiveness due to high inflation. Consumers visiting low-priced coffee stores cited affordable prices, decent taste, and accessibility as the advantages of low-priced coffee. It is also interpreted that the fact that it is a representative 'small capital startup' industry played a role. Opening a cafe does not require special skills, so the entry barrier is low.
According to the 2022 service industry survey results updated on the Statistics Korea National Statistical Portal, total sales of coffee specialty stores amounted to 15.5 trillion won in 2022. The number of workers was 270,000, and most worked with 1 to 4 employees per store.
The industry expects the cafe market to soon reach saturation. According to the franchise business status statistics announced by the Fair Trade Commission in April 2023, there were 26,000 franchise stores among domestic cafes. This is a 13% increase compared to the number of coffee industry franchise stores in 2022.
The number of coffee brands was 886, more than 200 greater than the 669 chicken brands, and even more than the number of convenience stores. The number of stores of the four major convenience stores (CU, GS25, Seven Eleven, Emart24) was about 55,000 as of the end of last year, which was only half the level of cafes that reached 100,000 stores.
An industry official said, "China has a large tea (cha) market and Japan also has a tea ceremony culture, but Korea is uniquely focused only on coffee," adding, "Coffee is the second most consumed beverage after water. There is no other beverage competing with coffee."
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